1. On July 1, 2020, Concord Company purchased $4,070,000 of Duggen Companys 8% bonds,...
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Accounting
1.
On July 1, 2020, Concord Company purchased $4,070,000 of Duggen Companys 8% bonds, due on July 1, 2027. The bonds, which pay interest semiannually on January 1 and July 1, were purchased for $3,550,000 to yield 10%. Determine the amount of interest revenue Concord should report on its income statement for the year ended December 31, 2020.
Interest revenue
$
2. On July 1, 2020, Whispering Company purchased $3,890,000 of Duggen Companys 8% bonds, due on July 1, 2027. The bonds, which pay interest semiannually on January 1 and July 1, were purchased for $3,430,000 to yield 10%. These bonds are classified as available-for sale and they have a fair value at December 31, 2020, of $3,534,000, prepare the journal entry (if any) at December 31, 2020, to record this transaction. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date
Account Titles and Explanation
Debit
Credit
Dec. 31, 2020
Answer & Explanation
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