Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
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Chapter A3, Problem 16E
To determine

(a)

Introduction:

The future value of amount includes the compound interest and the initial cash flow. It considers the time value of money.

To prepare:

Cash Flow for investments.

To determine

(b)

Introduction:

Investment in debt security (available for sale securities and trading securities) as well as equity securities is recorded using Fair Value Method.

To calculate:

The value of investment at maturity.

To determine

(c)

Introduction:

Investment in debt security (available for sale securities and trading securities) as well as equity securities is recorded using Fair Value Method.

To compute:

The amount of interest earned on the investment until Dec 31, 2020.

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