sandhill Company purchased, on January 1, 2020, as an available-for-sale security, $77,000 of the 7%, 5-year bonds of Chester Corporation for $71,162, which provides an 10 % return.
Prepare Bramble’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. (Assume a zero balance in the Fair Value Adjustment account.) The bonds have a year-end fair value of $78,850.

Answer rating: 100% (QA)

A C D 1 Accounts title and explanation Debit Credit Debt Investme... View the full answer