Homework Answers
Amortized cost = $405,117
Discount on bond investment:
= $500,000 - $405,117
= $94,883
| Cost of bond investment | 500000 |
| Less. Proceeds from sale | (400000) |
| Less. Discount on bond investment | (94883) |
| Loss on sale of investment | 5,117 |
Journal entry to record sale :
Cash Dr. 400,000
Discount on bond investment Dr. 94,883
Loss on sale of investment Dr. 5117
Investment in bonds Cr. 500000
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