Using the information provided in E16- 2, prepare the fair value adjustment journal entries at the end
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In E16-2
John Quinn Associates acquired $ 7,550,000 par value, 6%, 20- year bonds on their date of issue, January 1 of the current year. The market rate at the time of issue is 10% and interest is paid semiannually on June 30 and December 31. Quinn uses the effective interest rate method to account for this investment. Quinn does not intend to hold the investment until maturity nor will it actively trade the bonds. The fair value of the bonds at the end of the year of acquisition is $ 5,197,500. Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
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Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
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