On January 1, 2023, Genevieve Ltd. purchased 8%, $100,000 (par value) bonds for $108,530. The...
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Accounting
On January 1, 2023, Genevieve Ltd. purchased 8%, $100,000 (par value) bonds for $108,530.
The bonds were purchased to yield 6%. Interest is paid on July 1 and January 1 and the bonds
mature on January 1, 2028. Genevieve uses the amortized cost method and the effective-interest
method to amortize the premium. Genevieve has a year end of December 31 and follows ASPE.
Instructions
a) Prepare the journal entry to record the purchase.
b) Prepare the journal entries for the receipt of interest and amortization of the premium for the remainder of 2023. Round all values to the nearest dollar.
c) To the nearest dollar, what is the carrying value of the investment at the end of 2024?
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