Provide the journal entries to reflect the purchase

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Question - On January 1, 20X1, Stable Entity (SE) purchases bonds issued by Grow Entity for $900,000. Stable Entity will receive an annual coupon payment of $75,000 and an additional $1,000,000 when the bond expires. On January 1, 20X3, SE is short on cash and needs to purchase new equipment to replace equipment that was destroyed in a factory fire. Stable Entity agrees with Cash Entity to sell all of its rights to future payments on the bond for $875,000. The value of the bond on the statement of financial position on January 1, 20X3 is $934,320. Provide the journal entries to reflect the purchase and eventual de-recognition of the bonds.

Reference no: EM133056678

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