January 1, 2021, an investor company acquires $470,000 of the investee company’s 7% bonds at a price of $391,000. Interest is received on January 1 of each year, and the bonds mature on January 1, 2031. The investment will provide the investor a 11% yield (assumed for ease of computation. Please do not attempt computations beyond years necessary). The bonds are classified as available-for-sale. Applying the effective-interest method, on December 31, 2022, the investor company's Debt Investment (AFS) account will be debited/credited by $__________. (Do NOT put a plus or minus sign in front of the amount. Do not round your answers for any part of the computation.)
January 1, 2021, an investor company acquires $470,000 of the investee company’s 7% bonds at a price of $391,000. Interest is received on January 1 of each year, and the bonds mature on January 1, 2031. The investment will provide the investor a 11% yield (assumed for ease of computation. Please do not attempt computations beyond years necessary). The bonds are classified as available-for-sale. Applying the effective-interest method, on December 31, 2022, the investor company's Debt Investment (AFS) account will be debited/credited by $__________. (Do NOT put a plus or minus sign in front of the amount. Do not round your answers for any part of the computation.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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January 1, 2021, an investor company acquires $470,000 of the investee company’s 7% bonds at a price of $391,000. Interest is received on January 1 of each year, and the bonds mature on January 1, 2031. The investment will provide the investor a 11% yield (assumed for ease of computation. Please do not attempt computations beyond years necessary). The bonds are classified as available-for-sale.
Applying the effective-interest method, on December 31, 2022, the investor company's Debt Investment (AFS) account will be debited/credited by $__________. (Do NOT put a plus or minus sign in front of the amount. Do not round your answers for any part of the computation.)
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