Question: Assume that on September 30 2014 Protex Inc paid 98

Assume that on September 30, 2014, Protex, Inc., paid 98 for 5.5% bonds of Booker Corporation as a long-term, held-to-maturity investment. Te maturity value of the bonds will be $75,000 on September 30, 2019. Te bonds pay interest on March 31 and September 30.

1. What method should Protex use to account for its investment in the Booker Corp. bonds?
2. Using the straight-line method of amortizing the discount on bonds, journalize all of Protex’s transactions on the bonds for 2014.
3. Show how Protex would report everything related to the bond investment on its balance sheet at December 31, 2014.

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  • CreatedJuly 25, 2014
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