Prepare moonwalker journal entries for purchase

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Question - Moonwalker Co. purchased, as a held-to-maturity investment, $50,000 of the 9% bonds of Prime Time Corp. for $46,304, which provides an 11% return. Prepare Moonwalker's journal entries for: (a) purchase of the investment and; (b) receipt of annual interest and discount amortization (effective interest method).

Assume the same as above, except that the bonds are purchased as an available-for-sale security. Year-end FV is $47,200. Prepare J/E's for: (a) the purchase; (b) interest and amortization and; (c) the year-end fair-value adjustment.

Reference no: EM133127439

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