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On January 1, 2017, Liu Corporation paid $241,960 to acquire bonds of Singh Investment Corp with...

On January 1, 2017, Liu Corporation paid $241,960 to acquire bonds of Singh Investment Corp with a par value of $240,000. The annual contract rate on the bonds is 6% and interest is paid semiannually on June 30 and December 31. The bonds mature after three years. The market rate of interest was 5.7%. Liu Corporation intends to hold the bonds until maturity.

Required:
1. Prepare an amortization schedule for the investment showing only 2017. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. Enter all the amounts as positive values.)



2-a. Prepare Liu’s entries to record the purchase of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to nearest dollar amount.)



2-b. Prepare Liu’s entries to record the receipt of the first two interest payments.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to nearest dollar amount.)



3. Show how the investment will appear on the December 31, 2017, balance sheet. (Do not round intermediate calculations. Round your final answers to nearest dollar amount.)

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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