Business, 31.03.2021 04:40, edamite12

On January 1, 2020, Baker Corp. purchased $70,000 of Chocolate Inc. bonds. These bonds pay 5% interest annually on December 31 and mature December 31, 2029. The investment is classified as a held-to-maturity investment because Baker has the intent and the ability to hold the bonds for 10 years. The effective rate on the bonds is 4.5%. 1. Prepare the journal entry for the purchase of the investment on January 1, 2020.
2. Prepare the journal entries to record interest received on December 31, 2020, and December 31, 2021.
3. Indicate the carrying value of the Chocolate bonds on Baker's December 31, 2021, balance sheet assuming that the fair value of the bonds on December 31, 2021, was $20,800.
• Note: List multiple debits or credits (when applicable) in alphabetical order.

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On January 1, 2020, Baker Corp. purchased $70,000 of Chocolate Inc. bonds. These bonds pay 5% intere...