Homework Answers
Solution 1:
Bond investment purchased for premium = 2
Solution 2:
Dollar amount of premium = $89,600 - $80,000 = $9,600
Solution 3:
| Journal Entries - Sandy Cheeks Corporation | |||
| Date | Particulars | Debit | Credit |
| 1-Jan-19 | Bond investment Dr | $80,000.00 | |
| Premium on bond investment Dr | $9,600.00 | ||
| To Cash | $89,600.00 | ||
| (To record investment in bond) | |||
| 30-Jun-19 | Cash Dr | $3,200.00 | |
| To Interest revenue | $2,900.00 | ||
| To Premium on bond investment ($9,600/32) | $300.00 | ||
| (To record interest receipt and premium amortization) | |||
| 31-Dec-10 | Cash Dr | $3,200.00 | |
| To Interest revenue | $2,900.00 | ||
| To Premium on bond investment ($9,600/32) | $300.00 | ||
| (To record interest receipt and premium amortization) | |||
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