On January 1, 2020, Bridgeport Company purchased 12% bonds
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On January 1, 2020, Bridgeport Company purchased 12% bonds, having a maturity value of $287,000 for $308,758.85. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Bridgeport Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair
2020 $306,500
2023 $297,700
2021 $296,800
2024 $287,000
2022 $295,800
(b) Prepare the journal entries to record the interest revenue and recognition of fair value for 2020.
(c) Prepare the
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