Brief Exercise 17-2
Garfield Company purchased, as an available-for-sale security,$83,000 of the 9%, 7-year bonds of Chester Corporation for $75,178,which provides an 11% return.
Prepare Garfield’s journal entries for (a) the purchase of theinvestment, (b) the receipt of annual interest and discountamortization, and (c) the year-end fair value adjustment. (Assume azero balance inthe Fair Value Adjustment account.) The bonds have a year-end fairvalue of $78,850. (Round answers to 0 decimal places,e.g. 1,225. Credit account titles are automatically indented whenamount is entered. Do not indent manually. If no entry is required,select “No Entry” for the account titles and enter 0 for theamounts.)
No.
Account Titles and Explanation
Debit
Credit
(a)
(b)
(c)
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