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Appropriate reporting category for investment

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Reference no: EM132419728

Problem: On February 18, 2020, Union Corporation purchased 10,000 shares of IBM bonds as a long-term investment for $600,000. Union will hold the bonds indefinitely, and may sell them if their price increases sufficiently. On December 31, 2020, and December 31, 2021, the market value of the bonds was $580,000 and $610,000, respectively.

Required

Question 1: What is the appropriate reporting category for this investment? Why?

Question 2: Prepare the adjusting entry for December 31, 2020.

Question 3: Prepare the adjusting entry for December 31, 2021. Please answer the question by provide detail calculation process.

Reference no: EM132419728

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