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malfutka [58]
3 years ago
5

Lock Company purchased $100,000, 10%, 5-year bonds on January 1, 20x1, with interest payable on July 1 and January 1. The effect

ive interest rate for these bonds was 8.5%. The market value on December 31, 20x1 was $104,400 and all bonds were sold for 103 on January 2, 20x2. Lock is a calendar-year corporation and use the effective interest method for amortization of premium or discount.
Required:
Prepare journal entries on January 1, 20x1, July 1, 20x1, December 31, 20x1 and January 1, 20x2 assuming the bond investment is classified as available-for-sale security.Assuming the bond investment is classified as available for sale security.
Business
1 answer:
Arte-miy333 [17]3 years ago
8 0

Answer:

Explanation:

see attached file.

Download docx
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