1A. Max's Company invests in the bonds issued by CarmCorp. On1/1/20 Max buys $10,000 of 8% bonds that pay interest on 1/1. Theymature in 5 years and yield 10%. Max pays $9,242. On 12/31/20, thefair market value of the bonds is $11,000. Assuming the bonds areclassified as "Trading", prepare the journal entries for 1/1/20,12/31/20, and 1/1/21. You may omit the closing journal entries.
1B. Max's Company invests in the bonds issued by CarmCorp. On1/1/20 Max buys $10,000 of 8% bonds that pay interest on 1/1. Theymature in 5 years and yield 10%. Max pays $9,242. On 12/31/20, thefair market value of the bonds is $11,000. Assuming the bonds areclassified as "HTM", prepare the journal entries for 1/1/20,12/31/20, and 1/1/21. You may omit the closing journal entries.
1C. Max's Company invests in the bonds issued by CarmCorp. On1/1/20 Max buys $10,000 of 8% bonds that pay interest on 1/1. Theymature in 5 years and yield 10%. Max pays $9,242. On 12/31/20, thefair market value of the bonds is $11,000. Assuming the bonds areclassified as "AFS", prepare the journal entries for 1/1/20,12/31/20, and 1/1/21. You may omit the closing journal entries.
