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Calculate the carrying value of the bond investment

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Question - On July 1, 2013, Houston Company purchased 8% bonds of Ames Corporation with a par value of $200,000 for $175,000 at a market rate of 10%. The bonds are to be held to maturity and pay interest semiannually on June 30 and December 31. The fair value of the bonds on December 31, 2013, was $190,000. The carrying value of the bond investment at December 31, 2013, at:

a. $ 175,000

b. $ 175,750

c. $ 182,000

d. $ 190,000

Reference no: EM132183383

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