a) Indicate whether the bonds were purchased at a discount or at a premium. (b) Prepare the adjusting entry to record the bonds at fair value at December 31, 2014. The Fair Value Adjustment account has a debit balance of Tk. 1,000 prior to adjustment. (c) Prepare the adjusting entry to record the bonds at fair value at December 31, 2016
a) Indicate whether the bonds were purchased at a discount or at a premium. (b) Prepare the adjusting entry to record the bonds at fair value at December 31, 2014. The Fair Value Adjustment account has a debit balance of Tk. 1,000 prior to adjustment. (c) Prepare the adjusting entry to record the bonds at fair value at December 31, 2016
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale.
31.12.14 31.12.15 31.12.16
Amortized Cost Tk. 491,150 519,442 550000
Fair Value Tk. 497,000 509,000 550000
Required:
(a) Indicate whether the bonds were purchased at a discount or at a premium.
(b) Prepare the
(c) Prepare the adjusting entry to record the bonds at fair value at December 31, 2016
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