On January 1, 2018, Rupar Retailers purchased $100,000 of Anand Company bonds at a discount of $5,000. The Anand bonds pay 6% interest but were purchased when the market interest rate was 7% for bonds of similar risk and maturity. The bonds pay interest semiannually on Jan 1 and July 1 of each year. Rupar accounts for the bonds as a held-to-maturity investment, and uses the effective interest method. As of Dec 31, 2018, the bonds were trading at a value of $94,000. The bond investment would be reported on the balance sheet at: A) 94,000 B) 95,000 C) 95,661 D) 100,000
On January 1, 2018, Rupar Retailers purchased $100,000 of Anand Company bonds at a discount of $5,000. The Anand bonds pay 6% interest but were purchased when the market interest rate was 7% for bonds of similar risk and maturity. The bonds pay interest semiannually on Jan 1 and July 1 of each year. Rupar accounts for the bonds as a held-to-maturity investment, and uses the effective interest method. As of Dec 31, 2018, the bonds were trading at a value of $94,000. The bond investment would be reported on the balance sheet at: A) 94,000 B) 95,000 C) 95,661 D) 100,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2018, Rupar Retailers purchased $100,000 of Anand Company bonds at a discount of $5,000. The Anand bonds pay 6% interest but were purchased when the market interest rate was 7% for bonds of similar risk and maturity. The bonds pay interest semiannually on Jan 1 and July 1 of each year. Rupar accounts for the bonds as a held-to-maturity investment, and uses the effective interest method. As of Dec 31, 2018, the bonds were trading at a value of $94,000. The bond investment would be reported on the
A) 94,000
B) 95,000
C) 95,661
D) 100,000
Please dont provide solutions image based thanku
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