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P17.4 (LO 1) (Debt Investments) amortization schedule with related fair values provided. These bonds are classified as available-for-sale. Presented below is information taken from a bond investment 12/31/20 12/31/21 12/31/22 Amortized cost Fair value $491,150 $519,442 $550,000 497,000 509,000 20550,000 Instuusti

P17.4 (LO 1) (Debt Investments) amortization schedule with related fair values provided. These bonds are classified as available-for-sale. Presented below is information taken from a bond investment 12/31/20 12/31/21 12/31/22 Amortized cost Fair value $491,150 $519,442 $550,000 497,000 509,000 20550,000 Instuusti

FINANCIAL ACCOUNTING
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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### P17.4 (LO 1) (Debt Investments) Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale. | Date | Amortized Cost | Fair Value | |------------|----------------|------------| | 12/31/20 | $491,150 | $497,000 | | 12/31/21 | $519,442 | $509,000 | | 12/31/22 | $550,000 | $550,000 | ### Instructions a. **Indicate whether the bonds were purchased at a discount or at a premium.** b. **Prepare the adjusting entry to record the bonds at fair value at December 31, 2020.** The Fair Value Adjustment account has a debit balance of $1,000 prior to adjustment. c. **Prepare the adjusting entry to record the bonds at fair value at December 31, 2021.**
Transcribed Image Text:### P17.4 (LO 1) (Debt Investments) Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale. | Date | Amortized Cost | Fair Value | |------------|----------------|------------| | 12/31/20 | $491,150 | $497,000 | | 12/31/21 | $519,442 | $509,000 | | 12/31/22 | $550,000 | $550,000 | ### Instructions a. **Indicate whether the bonds were purchased at a discount or at a premium.** b. **Prepare the adjusting entry to record the bonds at fair value at December 31, 2020.** The Fair Value Adjustment account has a debit balance of $1,000 prior to adjustment. c. **Prepare the adjusting entry to record the bonds at fair value at December 31, 2021.**
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