On january 1, 2017, tusk company issued $300 million of bonds with a 6% coupon interestrate. the bonds mature in 10 years and pay interest annually on december 31 of each year. the market rate of interest on january 1, 2017, for bonds of this risk class was 6%. tusk company closes its books on december 31.tusk elected the fair value option under asu2016-1 to account for the bonds. required: 1. what amount will appear for the bonds on tusk company’s balance sheet on january 1,2017? 2. what journal entries will tusk company make during 2017 to record the effects of thebonds if the market interest rate for these types of bonds is 9% at december 31, 2017? 3. how would your answer change if the increase in interest rate were due to deterioratingfinancial conditions?
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On january 1, 2017, tusk company issued $300 million of bonds with a 6% coupon interestrate. the bon...
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