Provide the entries on the date of sale

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Question - Financial assets measured at FVOCI

On January1, 20x1, ABC Co. acquired 10%, $1,000,000 bonds for $ 827,135. The bonds mature on December 31, 20x3 and pay annual interest every December 31. ABC Co. incurred transaction costs $80,000 on the acquisition. The effective interest rate adjusted for the effect of the transaction costs is 14%. The bonds are to be held under a "hold to collect and sell" business model. Information on fair values is as follows:

December 31, 20x1 - 98

December 31, 20x2 - 102

December 31, 20x3 - 100

Requirements - Prepare journal entries in 20x1 and 20x2.

Use the facts in problem #14 but assume the bonds were sold for $900,000 on July 1, 20x2.

Requirements - Provide the entries on the date of sale.

Reference no: EM132529961

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