Presented below is information taken from a bond investment amortization schedule, with related fair values provided. These

Question:

Presented below is information taken from a bond investment amortization schedule, with related fair values provided. These bonds are classified as FV-OCI.

Instructions

a. Were the bonds purchased at a discount or at a premium?

b. Prepare the adjusting entry to record the bonds at fair value at December 31, 2020. The fair value adjustment account has a debit balance of $1,000 prior to adjustment.

c. Prepare the adjusting entry to record the bonds at fair value at December 31, 2021.

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Related Book For answer-question

Intermediate Accounting Volume 1

ISBN: 978-1119496496

12th Canadian edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy

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Question Posted: Nov 29, 2019 09:24 AM

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Presented below is information taken from a bond investment amortization schedule, with related fair values provided. These

Question:

12/31/21 $519,442 12/31/22 12/31/20 Amortized cost Fair value $550,000 $497,000 $550,000 $509,000

Step by Step Answer:

a The bonds were purchased at a discount That is they were purchased at less tha...View the full answer

Intermediate Accounting Volume 1

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