Financial Accounting

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Valuation of Held-to-Maturity Investment


Agent Smith Co. purchased a \$100,000 par value, 8% bond on January 1, 2015. The maturity date is January 1, 2018. The company purchased the bond at \$95,026. Interest on the bond will be paid on June 30 and December 31 every year. The company had the intention and the ability to hold the investment to the maturity date.

(I): On January 1, 2015, what is the reporting value of this bond investment (in \$)?

(II): On June 30, what is the total amount of cash the company receives (in \$)?