Do not give image format D678 REQUIRED:9 a)10b)11C)12FGOn May 1, 2022, on their issue date, Graco Investor Inc. purchased 7%, $500,000, 15-year bonds. Interest is paid semi-annually on May 1st and November1 of each year, the first interest payment will be on November 1, 2022. Graco Investor follows IFRS and uses the effective interest method for amortizingpremium or discount. The current market rate was 8%. On December 31, 2022, the bonds are trading at 98.Prepare the journal entry to record the purchase of the bond assuming Graco Investor is planning on keeping the investment until it matures.Prepare the journal entry to record the receipt of the first interest payment on November 1, 2022Prepare any journal entries, if required, for year-end on December 31, 2022.(show calculations for all of the above, rounding to nearest dollar)

Journal entries are recorded by using the principle of double-entry bookkeeping. Thus, it requires…

Answered: a) b) Prepare the journal entry to…

a) b) Prepare the journal entry to record the purchase of the bond assuming Graco Investor is planning on keeping the investment until it matures, Prepare the journa

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 71E

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Question

Do not give image format

D
6
7
8 REQUIRED:
9 a)
10
b)
11
C)
12
F
G
On May 1, 2022, on their issue date, Graco Investor Inc. purchased 7%, $500,000, 15-year bonds. Interest is paid semi-annually on May 1st and November
1 of each year, the first interest payment will be on November 1, 2022. Graco Investor follows IFRS and uses the effective interest method for amortizing
premium or discount. The current market rate was 8%. On December 31, 2022, the bonds are trading at 98.
Prepare the journal entry to record the purchase of the bond assuming Graco Investor is planning on keeping the investment until it matures.
Prepare the journal entry to record the receipt of the first interest payment on November 1, 2022
Prepare any journal entries, if required, for year-end on December 31, 2022.
(show calculations for all of the above, rounding to nearest dollar)

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