Assume the same information as in E17.3 except that Roosevelt has an active trading strategy for these bonds. The fair value of the bonds at December 31 of each yearend is as follows.

Instructions
a. Prepare the journal entry at the date of the bond purchase.
b. Prepare the journal entries to record the interest received and recognition of fair value for 2019.
c. Prepare the journal entry to record the recognition of fair value for 2020.
d. Discuss how the response to (c) will be different assuming Roosevelt has a strategy of held-for-collection and selling.

Transcribed Image Text:

2019 $534,200 2022 $517,000 2020 $515,000 2023 $500,000 2021 $513,000