FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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(Impairment of Debt Securities) Hagar Corporation has municipal bonds classified as a held-to-maturity at December 31, 2017. These bonds have a par value of $800,000, an amortized cost of $800,000, and a fair value of $720,000. The company believes that impairment accounting is now appropriate for these bonds.
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(a) Prepare the
(b) What is the new cost basis of the municipal bonds? Given that the maturity
(c) At December 31, 2018, the fair value of the municipal bonds is $760,000. Prepare the entry (if any) to record this information.
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