On December 31, 2020, Alberta Inc. purchased $500,000, 10% bonds issued by Banff Ltd. The bonds have a maturity date of December 31, 2026. The market interest rate on December 31, 2020 was 9.5%. If Alberta Inc. accounts for this investment under the amortized cost model, what is the amount at which the Investment in Banff Ltd. Bonds will be reported on the statement of financial position at December 31, 2021, given that the current market interest rate is 9%? $490,523 $509,599 $519,448 $511,050

On December 31, 2020, Alberta Inc. purchased $500,000, 10% bonds issued by Banff Ltd. The bonds have a maturity date of December 31, 2026. The market interest rate on December 31, 2020 was 9.5%. If Alberta Inc. accounts for this investment under the amortized cost model, what is the amount at which the Investment in Banff Ltd. Bonds will be reported on the statement of financial position at December 31, 2021, given that the current market interest rate is 9%? $490,523 $509,599 $519,448 $511,050

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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Question

On December 31, 2020, Alberta Inc. purchased $500,000, 10% bonds issued by Banff Ltd. The
bonds have a maturity date of December 31, 2026. The market interest rate on December 31, 2020
was 9.5%. If Alberta Inc. accounts for this investment under the amortized cost model, what is the
amount at which the Investment in Banff Ltd. Bonds will be reported on the statement of financial
position at December 31, 2021, given that the current market interest rate is 9%?
$490,523
$509,599
$519,448
$511,050

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