Can I ask for the solutions for this problem? This is about Intermediate Accounting.

Problem#2

On Jan. 1, 2020, Lili Company purchased bonds with face amount of 4,000,000 for 4,206,000. The business model of the entity in managing the financial asset is to collect contractual cash flows that are solely payment of principal and interest and also to sell the bonds in the open market.

The entity has not elected the fair value option of measuring financial asset.

The bonds mature on Dec. 31, 2022 and pay 10% interest annually on Dec. 31 each year with 8% effective yield.

The bonds are quoted at 95 on Dec. 31, 2020 and 90 on Dec. 31, 2021.

1.) What amount of unrealized loss should be reported as component other comprehensive income in 2020?

a. 342,480

b. 406,000

c. 469,520

d. 0

2.) What amount of unrealized loss should be reported as component of other comprehensive income in 2021?

a. 473,878

b. 131,398

c. 200,000

d. 0

3.) What amount of cumulative unrealized loss should be reported in the statement of changes in equity on Dec. 31, 2021?

a. 406,000

b. 606,000

c. 473,878

d. 0

4.) What is the carrying amount of the bond investment to be reported on Dec. 31, 2021?

a. 4,206,000

b. 3,600,000

c. 3,800,000

d. 4,673,878