On January 1, 2020, Growth Inc. (Growth) purchased, in US funds, $500,000 of bonds of Big Company (Big). On that date, the bonds were trading at par. These bonds pay 10% interest annually each December 31. The bonds mature on December 31, 2022. The following exchange rates were applicable between 2020 and 2022. The following are the relevant foreign exchange rates: January 1, 2020 US$1 = CDN$1.5254 Average rate for 2020 US$1 = CDN $1.5140 December 31, 2020 US$1 = CDN $1.4725 Average rate for 2021 US$1 = CDN $1.4600 December 31, 2021 US$1 = CDN $1.4425 Average rate for 2022 US$1 = CDN $1.4500 %3D December 31, 2022 US$1 = CDN $1.4575 Prepare Growth's journal entries for each of 2020, 2021 and 2022.
On January 1, 2020, Growth Inc. (Growth) purchased, in US funds, $500,000 of bonds of Big Company (Big). On that date, the bonds were trading at par. These bonds pay 10% interest annually each December 31. The bonds mature on December 31, 2022. The following exchange rates were applicable between 2020 and 2022. The following are the relevant foreign exchange rates: January 1, 2020 US$1 = CDN$1.5254 Average rate for 2020 US$1 = CDN $1.5140 December 31, 2020 US$1 = CDN $1.4725 Average rate for 2021 US$1 = CDN $1.4600 December 31, 2021 US$1 = CDN $1.4425 Average rate for 2022 US$1 = CDN $1.4500 %3D December 31, 2022 US$1 = CDN $1.4575 Prepare Growth's journal entries for each of 2020, 2021 and 2022.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![On January 1, 2020, Growth Inc. (Growth) purchased, in US funds, $500,000 of
bonds of Big Company (Big). On that date, the bonds were trading at par. These
bonds pay 10% interest annually each December 31. The bonds mature on
December 31, 2022. The following exchange rates were applicable between
2020 and 2022.
The following are the relevant foreign exchange rates:
January 1, 2020
US$1 = CDN$1.5254
%3|
Average rate for 2020 US$1 = CDN $1.5140
December 31, 2020
US$1 = CDN $1.4725
%3|
Average rate for 2021
US$1 = CDN $1.4600
December 31, 2021
US$1 = CDN $1.4425
Average rate for 2022
US$1 = CDN $1.4500
December 31, 2022
US$1 = CDN $1.4575
Prepare Growth's journal entries for each of 2020, 2021 and 2022.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F38f2cdde-853a-40f7-b427-9b838572b469%2Fb4bf34c7-f41e-4f6c-b7c6-26db049add4e%2Frvt6eym_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 1, 2020, Growth Inc. (Growth) purchased, in US funds, $500,000 of
bonds of Big Company (Big). On that date, the bonds were trading at par. These
bonds pay 10% interest annually each December 31. The bonds mature on
December 31, 2022. The following exchange rates were applicable between
2020 and 2022.
The following are the relevant foreign exchange rates:
January 1, 2020
US$1 = CDN$1.5254
%3|
Average rate for 2020 US$1 = CDN $1.5140
December 31, 2020
US$1 = CDN $1.4725
%3|
Average rate for 2021
US$1 = CDN $1.4600
December 31, 2021
US$1 = CDN $1.4425
Average rate for 2022
US$1 = CDN $1.4500
December 31, 2022
US$1 = CDN $1.4575
Prepare Growth's journal entries for each of 2020, 2021 and 2022.
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