Using the following information, prepare journal entries for the year 2023 and indicate

how ABC Corp. should report its investment in its year-end financial statements:

the investment is considered Held to maturity.

On January 1, 2023, XYZ issued $6,000,000 of 8% bonds, due on January 1, 2031.

The bonds, which pay interest semiannually on January 1 and July 1, were purchased by ABC Corp. for $5,349,725 to yield 10%.

The fair value on December 31, 2023, is $5,340,000.

2. Using the information on problem 2, prepare journal entries for the year 2023

assuming the investment is considered Trading securities. Also, indicate how ABC

should report its investment in its year-end financial statements.

Ex. 9.- Debt Investments 1. Using the following information, prepare journal entries for the year 2023 and indicate how ABC Corp. should report its investment in its year-end financial statements: the investment is considered Held to maturity. On January 1, 2023, XYZ issued $6,000,000 of 8% bonds, due on January 1, 2031. The bonds, which pay interest semiannually on January 1 and July 1, were purchased by ABC Corp. for $5,349,725 to yield 10%. The fair value on December 31, 2023, is $5,340,000. 2. Using the information on problem 2, prepare journal entries for the year 2023 assuming the investment is considered Trading securities. Also, indicate how ABC should report its investment in its year-end financial statements.