medium · Financial Accounting accounting-cycle-financial-statements
A firm purchases $1,000,000 of 5-year Treasury bonds at par and has the 'positive intent and ability' to hold them until the principal is repaid. After one year, market interest rates rise, and the bonds' fair value drops to $950,000.
What amount is reported on the balance sheet for these bonds?
- $1,000,000
- $950,000
- $975,000
- $1,050,000
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