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What amount will be reported for the long-term investment

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Reference no: EM133050841

Question - Suppose an investor purchases $100,000 of 5% Government of Canada bonds at a price of $95,735 on June 1, 2020.

The bonds pay interest on June 1 and December 1. The investor intends to hold the bonds until their maturity on June 2, 2025.

The bonds will be outstanding for five years (10 interest periods). The investor paid a discounted price for the bonds of $95,735 (an effective interest rate of 6%). What amount will be reported for the long-term investment in bonds on the balance sheet on December 31, 2020?

A. $96,172

B. $95,735

C. $96,108

D. $100,000

Reference no: EM133050841

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