Question: Assume that on September 30 2014 Rentex Inc paid 96

Assume that on September 30, 2014, Rentex, Inc., paid 96 for 7% bonds of Oleander Corporation as a long-term held-to-maturity investment. The maturity value of the bonds will be $80,000 on September 30, 2019. The bonds pay interest on March 31 and September 30.

1. What method should Rentex use to account for its investment in the Oleander Corp. bonds?
2. Using the straight-line method of amortizing the discount on bonds, journalize all of Rentex’s transactions on the bonds for 2014.
3. Show how Rentex 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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