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Prepare its journal entries for purchase of the investment

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Question - Bridgeport Corporation purchased $68,100 of 7-year, 7% bonds of Hu Inc. for $61,143 to yield an 9% return, and classified the purchase as an amortized cost method investment. The bonds pay interest semi-annually.

Required -

Assuming Bridgeport Corporation applies IFRS, prepare its journal entries for the purchase of the investment and the receipt of semi-annual interest and discount amortization for the first two interest payments that will be received.

Assuming Bridgeport applies ASPE and has chosen the straight-line method of discount amortization, prepare the same three entries requested above.

Reference no: EM132783572

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