On January 1, 2021, Laura Company purchased $930,000 of 10% bonds at face value. Interest is payable once a year on January 1. The bond market value was $980,000 on December 31, 2021. There was no balance in the fair value adjustment account. Required: Prepare the appropriate journal entries for 2021 assuming the bonds are classified as: 1. Trading securities. 2. Available for sale securities. 3. Held to maturity securities.

On January 1, 2021, Laura Company purchased $930,000 of 10% bonds at face value. Interest is payable once a year on January 1. The bond market value was $980,000 on December 31, 2021. There was no balance in the fair value adjustment account. Required: Prepare the appropriate journal entries for 2021 assuming the bonds are classified as: 1. Trading securities. 2. Available for sale securities. 3. Held to maturity securities.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 1MC

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