Question
Zero-coupon bonds 13. On January 1, 20x1, ABC Co. acquired 10%, $100,000 bonds for $94,738. The bonds, together with accrued interests, are due on December
Zero-coupon bonds
13. On January 1, 20x1, ABC Co. acquired 10%, $100,000 bonds for $94,738. The bonds, together with accrued interests, are due on December 31, 20x3. The bonds are measured at amortized cost. The effective interest rate is 12%.
Requirements:
a. How much are the carrying amounts of the interest receivable on December 31, 20x1 and December 20x2, respectively?
b. How much are the carrying amounts of the investment on December 31, 20x1 and December 20x2, respectively?
c. Prepare the journal entries in 20x1 and 20x2
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Auditing Theory And Its Application
Authors: Hanson Arthur Warren, Arthur W. Hanson
1st Edition
1406753351, 978-1406753356
