Garfield Company purchased, as an available-for-sale securities, $80,000 of the 9%, 5-year bonds of Chester Corporation for

Question:

Garfield Company purchased, as an available-for-sale securities, $80,000 of the 9%, 5-year bonds of Chester for $74,086, which provides an 11% return. Prepare Garfield's journal entries for
(a) The purchase of the investment,
(b) The receipt of annual interest and discount amortization,
(c) The year-end fair value adjustment. The bonds have a year-end fair value of $75,500. Assume effective interest amortization is used
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...