Fair value: Fair value is a selling price which is agreed by the buyer and seller, it is also the estimate of the potential market price of good, service or asset.
Purchase of bonds at premium: When the bonds are purchased in the amount above the face value it is said the purchase of bond at a premium. And the difference between the face value and the purchased price is known as premium of the bond.
(a) To determine: To determine the purchase of bonds at a discount or at a premium.
Given information: All the related information is presented in the question document.
(b) To determine: To determine the
Given information: All the related information is presented in the question document.
(c) To determine: To determine the adjusting entry to record the bonds at fair value.
Given information: All the related information is presented in the question document.
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