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Which journal entries should Downs Inc make

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Question - On January 1, 2020, Downs Inc. acquires a debt investment by buying Sky Co. 6% $100,000 bonds for $98,000. The bonds yield is 8%, and interests are paid annually. Downs Inc. accounts for this investment using the FV-NI model and chooses to report interests separately from unrealized holding gains/losses. By December 31, 2020, Downs's accounting year-end, the fair value of these bonds has fallen to $95,000 due to the market downturn. Which journal entries should Downs Inc. make for these bonds at December 31, 2020?

Reference no: EM133174106

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