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What effect would have on the carrying value of investment

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Problem 1: Vaughn Company did not amortize the discount on its short-term bond investment. What effect would this have on the carrying value of the investment and on net income, respectively?

a. overstated, overstated

b. understated, overstated

c. understated, understated

d. no effect, no effect

Reference no: EM132765988

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