Answer:
Dr bonds investment $2,400,000
Cr cash $2,400,000
Dr cash $ 72,000.00
Cr interest revenue $72,000.00
Dr fair value adjustment $ 340,000.00
Cr unrealized gains $340,000.00
2022:
Dr cash $ 72,000.00
Cr interest revenue $72,000.00
Dr realized loss($2,160,000-$2,400,000) $240,000
Cr fair value adjustment $240,000
sale of bonds:
Dr cash $2,160,000
Dr realized loss $240,000
Cr bonds investment $2,400,000
Explanation:
Upon purchase of investment,the bond investments is debited with $2.4 million and cash credited with same amount
Interest revenue for last half year=$2,400,000*6%*6/12=$72,000.00
unrealized gains=$2,740,000-$2,400,000=$340,000.00
Interest for first half of 20222=$2,400,000*6%*6/12=$72,000.00
