On January 1, 2021, BEZOS COMPANY acquired 10%, 3-year bonds with face value of $ 2,000,000. Interest is payable semiannually every June 30 and Decembe. 31. The bonds were acquired for 104. Commission paid for the acquisition amounted to $ 54,670. After considering the transaction cost, the effective rate o the bond on initial recognition is computed at 8%. The objective of BEZOS COMPANY business model is to collect the contractual cash flows and sel financial asset. The fair value of the investment for the next periods are the following: 6/30/2021 105 6/30/2022 102 6/30/2023 108 12/31/2021 101 12/31/2022 112 12/31/2023 120 On January 1, 2022, the bonds were sold at 107, and the company incurrec transaction costs amounting to $ 20.000
On January 1, 2021, BEZOS COMPANY acquired 10%, 3-year bonds with face value of $ 2,000,000. Interest is payable semiannually every June 30 and Decembe. 31. The bonds were acquired for 104. Commission paid for the acquisition amounted to $ 54,670. After considering the transaction cost, the effective rate o the bond on initial recognition is computed at 8%. The objective of BEZOS COMPANY business model is to collect the contractual cash flows and sel financial asset. The fair value of the investment for the next periods are the following: 6/30/2021 105 6/30/2022 102 6/30/2023 108 12/31/2021 101 12/31/2022 112 12/31/2023 120 On January 1, 2022, the bonds were sold at 107, and the company incurrec transaction costs amounting to $ 20.000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Compute the initial measurement of the bonds on acquisition
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