Question#:
On January THD Company purchased bonds having a maturity value of Tk
The bonds provide the bondholders with a yield. They are dated January
and mature January with interest receivable December of each year. THD Company
uses the effectiveinterest method to allocate unamortized discount or premium. The securities
are classified as availableforsale. The fair value of the bonds at December of each yearend
is as follows.
Required:
a Indicate whether the bonds were purchased at a discount or at a premium.
b Prepare the journal entry at the date of the bond purchase.
c Prepare the journal entries to record the interest received for
d Prepare the adjusting entry to record the bonds at fair value at December The
Fair Value Adjustment account has a debit balance of Tk prior to adjustment
e Prepare the journal entry to record the recognition of fair value for
