Refer to the information in E17.3 and assume that Roosevelt elected the fair value option for this
Question:
Refer to the information in E17.3 and assume that Roosevelt elected the fair value option for this heldfor- collection investment.
Instructions
a. Prepare any entries necessary at December 31, 2022, assuming the fair value of the bonds is $540,000.
b. Prepare any entries necessary at December 31, 2023, assuming the fair value of the bonds is $525,000.
E17.3
On January 1, 2022, Roosevelt Company purchased 12% bonds having a maturity value of $500,000 for $537,907.40. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2022, and mature January 1, 2027, with interest received December 31 of each year. Roosevelt’s business model is to hold these bonds to collect contractual cash flows.
Step by Step Answer:
Intermediate Accounting IFRS
ISBN: 9781119607519
4th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield