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a) b) Prepare the journal entry to record the purchase of the bond assuming Graco Investor is planning on keeping the investment until it matures, Prepare the journa

a) b) Prepare the journal entry to record the purchase of the bond assuming Graco Investor is planning on keeping the investment until it matures, Prepare the journa

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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D 6 7 8 REQUIRED: 9 a) 10 b) 11 C) 12 F G On May 1, 2022, on their issue date, Graco Investor Inc. purchased 7%, $500,000, 15-year bonds. Interest is paid semi-annually on May 1st and November 1 of each year, the first interest payment will be on November 1, 2022. Graco Investor follows IFRS and uses the effective interest method for amortizing premium or discount. The current market rate was 8%. On December 31, 2022, the bonds are trading at 98. Prepare the journal entry to record the purchase of the bond assuming Graco Investor is planning on keeping the investment until it matures. Prepare the journal entry to record the receipt of the first interest payment on November 1, 2022 Prepare any journal entries, if required, for year-end on December 31, 2022. (show calculations for all of the above, rounding to nearest dollar)
Transcribed Image Text:D 6 7 8 REQUIRED: 9 a) 10 b) 11 C) 12 F G On May 1, 2022, on their issue date, Graco Investor Inc. purchased 7%, $500,000, 15-year bonds. Interest is paid semi-annually on May 1st and November 1 of each year, the first interest payment will be on November 1, 2022. Graco Investor follows IFRS and uses the effective interest method for amortizing premium or discount. The current market rate was 8%. On December 31, 2022, the bonds are trading at 98. Prepare the journal entry to record the purchase of the bond assuming Graco Investor is planning on keeping the investment until it matures. Prepare the journal entry to record the receipt of the first interest payment on November 1, 2022 Prepare any journal entries, if required, for year-end on December 31, 2022. (show calculations for all of the above, rounding to nearest dollar)
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