The bonds pay interest semiannually on january 1 and

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Unformatted text preview: st rate was 7% for bonds of similar risk and maturity. The bonds pay interest semiannually on January 1 and July 1 of each year. Rupar accounts for the bonds as a held-to-maturity investment, and uses the effective interest method. In Rupar's December 31, 2013, journal entry to record the second period of interest, Rupar would record a credit to interest revenue of: A. $3,336. B. $3,325. C. $3,000. D. $3,500. 35. If Dinsburry Company concluded that an investment originally classified as a trading security would now more appropriately be classified as held to maturity, Dinsburry would: A. Not reclassify the investment, as original classifications are irrevocable. BReclassify the investment as held to maturity and immediately recognize in net income all unrealized . gains and losses that have not already been recognized as of the reclassification date. C Reclassify the investment as held to maturity and treat the fair value as of the date of reclassification as . the investment's amortized cost basis for future amortization. D. Reclassify the investment as held to maturity, but there would be no income effect. 36. If Ziggy Company concluded that an investment originally classified as held to maturity would now more appropriately be classified as available for sale, Ziggy would: A. Not reclassify the investment, as original classifications are irrevocable. B Reclassify the investment as available for sale and immediately recognize in net income any unrealized . gain or loss on the reclassification date. C Reclassify the investment as available for sale and immediately recognize in accumulated other . comprehensive income any unrealized gain or loss on the reclassification date. D. Need to restate earnings, as the original classification was in error. 37. If Dizbert Company concluded that an investment originally classified as available for sale would now more appropriately be classified as held to maturity, Dizbert would: A. Not reclassify the investment, as original classifications are irrevocable. B Reclassify the investment as held to maturity an...
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