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Lab corp. has a December 31 fiscal year-end. On
January 1, 2018, Langley purchased Hangover Inc. 10% corporate bonds with a
maturity value of $500,000. Hangover provide bondholders with a yield of 12% and will
mature on December 31, 2024, The bond pays interest on December 31. The bonds
had a market value of $460.000 at the year end of 2019. Lab crop. intends to hold the
Hangover bonds to collect contractual cash flow and sells them for a profit.
a. whats the price of the bond ?
b. complete the amortization schedule for lab corp. in hangover bonds, show all calculations ?
c. on dec 31 2020, lab sold hangover bonds for 470,000, prepare the journal and the closing entries ?
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