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Prepare the entries in pluto books

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Question - On January 1, 2020 pluto corp. acquired 8%, $100,000(face value) bonds of Uranus Ltd.to yield 6%. The bonds were dated January 1, 2020 and mature on December 31, 2025, with interest payable each January 1.pluto intends to hold the bonus to maturity and will use the FV -NI model and the effective interest method of amortization of bond premium or discount.

Require - Prepare the following entries in pluto's books:

a. Acquisition of bonds on January 1, 2020

b. Year- end adjusting entry at December 31, 2020

c. Receipt of the first interest payment on January 1, 2021.

Reference no: EM132579535

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