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Waterway Corporation has municipal bonds classified as a held-to-maturity at Decemb 2020. These bonds have a par value of $826,000, an amortized cost of $826,000, and value of $754,000. The company believes that impairment accounting is now appropria these bonds. Prepare the journal entry to recognize the impairment. What is the new c of the municipal bonds? Given that the maturity value of the bonds is $826,000, should

Waterway Corporation has municipal bonds classified as a held-to-maturity at Decemb 2020. These bonds have a par value of $826,000, an amortized cost of $826,000, and value of $754,000. The company believes that impairment accounting is now appropria these bonds. Prepare the journal entry to recognize the impairment. What is the new c of the municipal bonds? Given that the maturity value of the bonds is $826,000, should

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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Waterway Corporation has municipal bonds classified as a held-to-maturity at December 31, 2020. These bonds have a par value of $826,000, an amortized cost of $826,000, and a fair value of $754,000. The company believes that impairment accounting is now appropriate for these bonds. Prepare the journal entry to recognize the impairment. What is the new cost basis of the municipal bonds? Given that the maturity value of the bonds is $826,000, should Waterway Corporation amortize the difference between the carrying amount and the maturity value over the life of the bonds? At December 31, 2021, the fair value of the municipal bonds is $790,000. Prepare the entry (if any to record this information)
Transcribed Image Text:Waterway Corporation has municipal bonds classified as a held-to-maturity at December 31, 2020. These bonds have a par value of $826,000, an amortized cost of $826,000, and a fair value of $754,000. The company believes that impairment accounting is now appropriate for these bonds. Prepare the journal entry to recognize the impairment. What is the new cost basis of the municipal bonds? Given that the maturity value of the bonds is $826,000, should Waterway Corporation amortize the difference between the carrying amount and the maturity value over the life of the bonds? At December 31, 2021, the fair value of the municipal bonds is $790,000. Prepare the entry (if any to record this information)
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