On January 1, 2018, Wyatt Company purchased $200,000 of available for sale bonds with a stated...
On January 1, 2018, Wyatt Company purchased $200,000 of available for sale bonds with a stated interest rate of 6%, for a term of six years. The bonds cost a total of $210,000 with a market interest rate of 4 %. Interest is paid annually on December 31. On December 31, the bonds had a fair value of $190,000. Record the investment, receipt of interest, and the year-end adjustment.
Homework Answers
| S.no | Particulars | Debit | Credit |
| a | Investment in bonds | $ 210,000.00 | |
| Cash | $ 210,000.00 | ||
| (being investment made in bonds) | |||
| b | Cash (200000*6%) | $ 12,000.00 | |
| Interest Revenue | $ 12,000.00 | ||
| (being interest received on bonds) | |||
| c | Fair Value Adjustment | $ 10,000.00 | |
| Investment in bonds | $ 10,000.00 | ||
| (being fall in value of investment recorded) | |||
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OPTIONS
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OPTIONS
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Investment in Available-for-Sale Securities
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balance sheet showed the following:
Marsh Company
Partial Balance Sheet
December 31, 2018
1
Assets
2
Investment in Available-for-Sale Securities
$14,000.00
3
Less:...
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