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Problem 14: Bond investment and fair value adjustment Finman Corporation acquired $65 million of 4%...

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Problem 14: Bond investment and fair value adjustment Finman Corporation acquired $65 million of 4% bonds on July 1, 2017, The market interest rate (yield) was 6% for bonds of similar risk and maturity. Finman paid $60 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management is holding the bonds in its trading portfolio. As a result of changing market conditions, the fair value of the bonds at December 31, 2017, was $62 million. Required: 1. Prepare the journal entry to record Finman's investment in the bonds on July 1, 2017. 2. Prepare the journal entries by Finman to record interest on December 31, 2017, at the effective (market) rate 3. Prepare any additional journal entry necessary for Finman to report its investment in the December 31, 2017 balance sheet

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