On July 1, 2016, Lex Co. purchased 600 of the $1,000 face value, 8% bonds of Zenon, Inc., for $630,000 (a 7% effective interest rate). The bonds, which mature on July 1, 2021, pay interest semiannually on January 1 and July 1. Lex used the effective interest method of amortization and appropriately recorded the bonds as non-trading. On Lex's December 31, 2016 statement of financial position, what would be the carrying value of the bonds?

Answer rating: 100% (QA)

Computation of Present value of bond purchased Bond Rate Market rate Face Value or Maturity Value Ma... View the full answer