FMT Inc. purchased a long-term investment $80m of 8% bonds on Jan.1, 2011, and classified them as available for sale investment. For bonds of similar risk and maturity the yield is 10%. Interest is received on June 30 and December 31. The fair value of bonds was $70m on December 31, 2011. The bonds mature in 5 years. Bonds with the face value of $40m were sold for $42m on January 20, 2012. Required: prepare all journal entries related to the investments in bonds for the year 2011

FMT Inc. purchased a long-term investment $80m of 8% bonds on Jan.1, 2011, and classified them as available for sale investment. For bonds of similar risk and maturity the yield is 10%. Interest is received on June 30 and December 31. The fair value of bonds was $70m on December 31, 2011. The bonds mature in 5 years. Bonds with the face value of $40m were sold for $42m on January 20, 2012. Required: prepare all journal entries related to the investments in bonds for the year 2011

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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