Date Cash interest Interest revenue Amortization of discount Discount balance Amortized Cost 7/1/2018 $ 33,367 $...

Date	Cash interest	Interest revenue	Amortization of discount	Discount balance	Amortized Cost
7/1/2018				$ 33,367	$ 666,633
12/31/2018	$ 42,000	$ 46,664	$ 4,664	28,703	671,297
6/30/2019	$ 42,000	46,991	4,991	23,712	676,288
12/31/2019	$ 42,000	47,340	5,340	18,372	681,628
6/30/2020	$ 42,000	47,714	5,714	12,658	687,342
12/31/2020	$ 42,000	48,114	6,114	6,544	693,456
6/30/2021	$ 42,000	48,542	6,542	2	699,998

USING THE TABLE ABOVE PLEASE ENTER USING FORMULAS OR ENTER MANUALLY FOR THE FINANCIAL STATEMENT BELOW.

PLEASE EXPLAIN HOW YOU GOT YOUR ANSWER. THANK YOU

	For year ended
Income Statement	12/31/2018	12/31/2019	12/31/2020	12/31/2021
Other revenue and expense
Interest revenue

Balance Sheet	12/31/2018	12/31/2019	12/31/2020
Assets
Investment in Bonds	$ 700,000	$ 700,000	$ 700,000
Less: Unamortized Discount
Investment, net	$ 700,000	$ 700,000	$ 700,000

	For year ended
Statement of Cash Flows, assuming no other transactions	12/31/2018	12/31/2019	12/31/2020	12/31/2021
Operating Activities - Direct Method
Interest Received
Net cash flows from operating activities

Operating Activities - Indirect method, assuming interest revenue was only source of income
Net Income
Less: amortization of discount on Investment in bonds
Net cash flows from operating activities	$ -	$ -	$ -	$ -

Investing Activities
Purchases of Investments in Bonds		-	-	-
Maturities of Investments in Bonds	-	-	-
Net cash flows from investing activities	$ -	$ -	$ -	$ -

Expert Solution

Solution:

	For year ended
Income Statement	12/31/2018	12/31/2019	12/31/2020	12/31/2021
Other revenue and expense
Interest revenue	$46,664.00	$94,331.00	$95,828.00	$48,542.00

Balance Sheet	12/31/2018	12/31/2019	12/31/2020
Assets
Investment in Bonds	$700,000.00	$700,000.00	$700,000.00
Less: Unamortized Discount	$28,703.00	$18,372.00	$6,544.00
Investment, net	$671,297.00	$681,628.00	$693,456.00

	For year ended
Statement of Cash Flows, assuming no other transactions	12/31/2018	12/31/2019	12/31/2020	12/31/2021
Operating Activities - Direct Method
Interest Received	$42,000.00	$84,000.00	$84,000.00	$42,000.00
Net cash flows from operating activities	$42,000.00	$84,000.00	$84,000.00	$42,000.00

Operating Activities - Indirect method, assuming interest revenue was only source of income
Net Income	$46,664.00	$94,331.00	$95,828.00	$48,542.00
Less: amortization of discount on Investment in bonds	$4,664.00	$10,331.00	$11,828.00	$6,542.00
Net cash flows from operating activities	$42,000.00	$84,000.00	$84,000.00	$42,000.00

Investing Activities
Purchases of Investments in Bonds	-$666,633.00	$0.00	$0.00	$0.00
Maturities of Investments in Bonds	$0.00	$0.00	$0.00	$700,000.00
Net cash flows from investing activities	-$666,633.00	$0.00	$0.00	$700,000.00

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