General Investment Co. (GIC) purchased bonds on January 1, 2021. GIC's accountant has projected the following amortization schedule from purchase until maturity:DateCash ReceivedInterest RevenueAmortization of DiscountAmortized Cost 1/1/2021 $194,758 6/30/2021$7,000 $7,790 $790 195,548 12/31/2021 7,000 7,822 822 196,370 6/30/2022 7,000 7,855 855 197,225 12/31/2022 7,000 7,889 889 198,114 6/30/2023 7,000 7,925 925 199,039 12/31/2023 7,000 7,961 961 200,000 1.At a discount. 2.At par. 3.Cannot be determined from the given information. 4.At a premium.GIC purchased the bonds:

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Answered: General Investment Co. (GIC) purchased…

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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General Investment Co. (GIC) purchased bonds on January 1, 2021. GIC's accountant has projected the following amortization schedule from purchase until maturity:

Date	Cash Received	Interest Revenue	Amortization of Discount	Amortized Cost
	1/1/2021								$	194,758
	6/30/2021	$	7,000		$	7,790	$	790		195,548
	12/31/2021		7,000			7,822		822		196,370
	6/30/2022		7,000			7,855		855		197,225
	12/31/2022		7,000			7,889		889		198,114
	6/30/2023		7,000			7,925		925		199,039
	12/31/2023		7,000			7,961		961		200,000

	1.	At a discount.
	2.	At par.
	3.	Cannot be determined from the given information.
	4.	At a premium.

GIC purchased the bonds:

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