Please use the information below to answer questions 1 and 2. Nguyen Company purchased...
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Accounting
Please use the information below to answer questions 1 and 2. Nguyen Company purchased $1,200,000 of 6%, 5-year bonds from Perez, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The bonds sold for $1,252,512 at an effective interest rate of 5%. Assume the bonds were purchased as an available for sale security and Nguyen uses effective-interest amortization.
1. What is the amount of interest revenue that would be recognized in 2021 related to these debt securities (round to the nearest dollar)?
2. Assume at December 31, 2021, the fair value of the Perez, Inc. bonds was $1,300,000. What should Nguyen report as other comprehensive income for 2021 related to this debt investment (input gain as positive number and loss as negative number)?
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