Prepare journal entries for Whispering Company

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Question - Whispering Company invests $11,300,000 in 6% fixed rate corporate bonds on January 1, 2020. All the bonds are classified as available-for-sale and are purchased at par. At year-end, market interest rates have declined, and the fair value of the bonds is now $11,955,000. Interest is paid on January 1.

Required - Prepare journal entries for Whispering Company to (a) record the transactions related to these bonds in 2020, assuming Whispering does not elect the fair option; and (b) record the transactions related to these bonds in 2020, assuming that Whispering Company elects the fair value option to account for these bonds.

Reference no: EM132676963

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