A. On January 1, 2020, Johnstone Co. purchased 8% bonds having a maturity value of $500,000, for $542,124. The bonds, issued by City Bank, provide the bondholders a 6% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest receivable each December 31. Johnstone’s business model is to hold these bonds until the maturity date to collect contractual cash flows.
Required: (Round all amounts to the nearest dollar.)
(a) How should this investment be classified...