Homework Answers
| Date | Accounts Title and Explantion | Debit | Credit |
| Jan 1, 2019 | Debt Investments | $100,000 | |
| Discount on bond investment | $7,210 | ||
| Cash | $92,790 | ||
| Dec 31, 2020 | Cash | $10,000 | |
| Discount on bond investment | $1,135 | ||
| Interest Revenue | $11,135 | ||
| Dec 31, 2020 | No Entry | ||
| Note: No changes in fair value need to be recognized | |||
| unless there is impairment. | |||
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QUESTION: On January 1, 2020, the company purchased $100,000, 10% bond investment at $92,790 due in...
On January 1, 2020, the company has purchased a 14 year $100,000 bonds investment. The bond...
On January 1, 2020, the company has purchased a 14 year $100,000
bonds investment. The bond calls for an annual payment of interest
on 12/31 at a contractual (stated) rate of 6%. Given the credit
standing of the issuing company, an interest rate of 8.25% has been
imputed as the effective rate. The principal amount of the bond is
due at maturity. The company classified this bond investment as
Held-to-Maturity.
1. At what amount should the investment be recorded on...
On January 1, 2020, National Retail purchased $100,000 of GEH Company bonds at a discount of $10,000.
On January 1, 2020, National Retail purchased $100,000 of GEH Company bonds at a discount of $10,000. The GEH bonds pay o interest but were purchased when the market interest rate was e for bonds of similar risk and maturity. The bonds pay interest semiannually on June 30 and December 31 of each year. National Retail accounts for the bonds as a held to maturity investment and uses the effective interest method in National Retail's annual income statement interest revenue...
On January 1, 2020, National Retail purchased $100,000 of GEH Company bonds at a discount of...
On January 1, 2020, National Retail purchased $100,000 of GEH Company bonds at a discount of $10,000. The GEH bonds pay 6% interest but were purchased when the market interest rate was 8% for bonds of similar risk and maturity. The bonds pay interest semiannually on June 30 and December 31 of each year. National Retail accounts for the bonds as a held-to-maturity investment and uses the effective interest method. In National Retail’s annual income statement, interest revenue will show:...
On January 1, 2020, Splish Company purchased 9% bonds having a maturity value of $250,000, for...
On January 1, 2020, Splish Company purchased 9% bonds having a maturity value of $250,000, for $270,502.00. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Splish Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category. A) Prepare the journal entry at the date of the bond purchase. Date Account...
On January 1, 2019, Sandy Cheeks Corporation purchased $80,000, 8%, 16-year bond as a LONG-TERM Investment...
On January 1, 2019, Sandy Cheeks Corporation purchased $80,000, 8%, 16-year bond as a LONG-TERM Investment for $89,600 cash. The bonds pay interest semi-annually each June 30 and December 31. Sandy Cheeks uses the straight- line method of amortization to amortize any premium or discount. Was the bond investment purchased at a premium or a discount? Type in 1 for discount and 2 for premium. exact number, no tolerance We were unable to transcribe this imageOn January 1, 2019, Sandy...
On January 1, 2020, Teal Company purchased 10% bonds having a maturity we of 5380.000, for...
On January 1, 2020, Teal Company purchased 10% bonds having a maturity we of 5380.000, for $410.343.38. The bands provide the bondholders with a 8% yield. They are dated January 1, 2020, and mature January 1 2025, with interest received on January 1 of each year. Teal Company uses the effective interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category 2.525 25. Credit runt titles are automatically indented when amounts entered. Do not...
On January 1, 2020, Ivanhoe Company purchased 11% bonds, having a maturity value of $320,000 for...
On January 1, 2020, Ivanhoe Company purchased 11% bonds, having a maturity value of $320,000 for $344,893.28. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Ivanhoe Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows....
On January 1, 2020, Swifty Company purchased 11% bonds, having a maturity value of $289,000 for...
On January 1, 2020, Swifty Company purchased 11% bonds, having a maturity value of $289,000 for $311,481.74. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Swifty Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows....
On January 1, 2020, Blue Company purchased 11% bonds, having a maturity value of $314,000 for...
On January 1, 2020, Blue Company purchased 11% bonds, having a maturity value of $314,000 for $338,426.53. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Blue Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows....
On January 1, 2020, Novak Company purchased 13% bonds, having a maturity value of $321,000 for...
On January 1, 2020, Novak Company purchased 13% bonds, having a maturity value of $321,000 for $344,727.36. The bonds provide the bondholders with a 11% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Novak Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows....
On January 1, 2020, the company has purchased a 14 year $100,000
bonds investment. The bond calls for an annual payment of interest
on 12/31 at a contractual (stated) rate of 6%. Given the credit
standing of the issuing company, an interest rate of 8.25% has been
imputed as the effective rate. The principal amount of the bond is
due at maturity. The company classified this bond investment as
Held-to-Maturity.
1. At what amount should the investment be recorded on...
On January 1, 2019, Sandy Cheeks Corporation purchased $80,000, 8%, 16-year bond as a LONG-TERM Investment for $89,600 cash. The bonds pay interest semi-annually each June 30 and December 31. Sandy Cheeks uses the straight- line method of amortization to amortize any premium or discount. Was the bond investment purchased at a premium or a discount? Type in 1 for discount and 2 for premium. exact number, no tolerance We were unable to transcribe this imageOn January 1, 2019, Sandy...
On January 1, 2020, Teal Company purchased 10% bonds having a maturity we of 5380.000, for $410.343.38. The bands provide the bondholders with a 8% yield. They are dated January 1, 2020, and mature January 1 2025, with interest received on January 1 of each year. Teal Company uses the effective interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category 2.525 25. Credit runt titles are automatically indented when amounts entered. Do not...
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