On 1 January 20X4, Queen Company purchased $6,700,000 of Sport Corp. 7% bonds, classified as...
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On 1 January 20X4, Queen Company purchased $6,700,000 of Sport Corp. 7% bonds, classified as an FVOCI-Bonds investment. The bonds pay semi-annual interest each 30 June and 31 December. The market interest rate was 5% on the date of purchase. The bonds mature on 31 December 20X8. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Calculate the price paid by Queen Company. (Round time value factor to 5 decimal places. Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.) Price paid 2. Construct a table that shows interest revenue reported by Queen, and the carrying value of the investment, for the first two interest periods. Use the effective-interest method. (Round your answers to the nearest whole dollar amount.) Period Cash Payment 2.5% Interest Revenue Premium Amortization Bond Carrying Value 0 1 2
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