Determine the purchase price of the bond

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A company purchased a $900,000, 5%, 10-year bond yielding 4% on July 1, 2019. Interest is to be paid semi-annually on January 1 and July 1. The company uses FV-NI for Bond investments and has a December 31 year-end.

Required:

Problem a. Determine the purchase price of the bond.

Problem b. Prepare the journal entry to record the bond investment on July 1, 2019.

Problem c. Prepare the required journal entry(ies) on December 31, 2019. The bond is quoted at a value of 101 on that date.

Problem d. Prepare the required journal entry(ies) on December 31, 2020. The bond is quoted at a value of 99 on that date.

Reference no: EM132864619

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