Question
In: Accounting
On January 1, 1996, Harvest Moon Inc. purchased $100,000,000 in 11% bonds that will mature in...
On January 1, 1996, Harvest Moon Inc. purchased $100,000,000 in 11% bonds that will mature in 4 years. Management intends to have the investment available-for-sale when the circumstances warrant. For bonds of similar risk and maturity, the market yield was 6%. Interest is received semiannually on June 30 and December 31. Due to changing market conditions, the fair value of the bonds at December 31, 1996, was $90,000,000.
Note: Harvest Moon Inc. follows IFRS.
Instructions:
1. Determine the journal entry to record the investment on January 1, 1996.
2. Determine the journal entry to record interest on June 30, 1996.
3. Determine the journal entry to record interest on December 31, 1996.
4. Determine the adjusting journal entry to report Harvest Moon Inc.'s investment on the December 31, 1996 balance sheet.
5. Determine the amount for "Carrying Value" as well as "Accumulated other comprehensive Income" that will be reported on the December 31, 1996 balance sheet.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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