Question

Problem 17-1 Presented below is an amortization schedule related to Riverbed Company's 5-year $160,000 bond with a 8% interest rate and a 6% yield, purchased on December 31, 2015, for 3173,480 Interest Bond Premium Amortization Carrying Amount Date Received $173.480 171.089 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 $12,800 12.500 12,800 12.800 1 2,500 $10.409 10.265 10,113 9,052 5.751 $2,391 2.535 2.587 2.345 301 168,554 165,867 e of the bonds at year endi The following schedule presents a comparison of the amortized cost and ar 12/31/16 12/31/17 12/31/18 12/31/10 Amortized cost $171,099 $168.554 $165.567 5163,019 Fair value $170,500 $170.400 $167,500 5154 200 12/31/20 160.000 $100 000 2015. auring the bonds are d ed -tomaty t i (a) (1) (c) (d) (e) (1) Prepare the journal arty to record the purchase of these bonds on Decembar Prepare the journal entry related to the held to maturity bonds for 2016 Prepare the journal entry related to the held tomatut bonds for 2018 Precure the only to record the purchase of these boo m ing Prepare the o n es related to the valable for sale bonds for 2015 Prepare the o n es related to the w o rstands for 2018 are classified as available for sale

Answer 1

and enter 0 for the amounts.)

No.	Date	Account Titles and Explanation	Debit	Credit
(a)	Dec. 31, 2015	Debt Investments	173480
		Cash		173480
(b)	Dec. 31, 2016	Cash	12800
		Interest Revenue		10409
		Debt Investments		2391
(c)	Dec. 31, 2018	Cash	12800
		Interest Revenue		10113
		Debt Investments		2687
(d)	Dec. 31, 2015	Debt Investments (AVS)	173480
		Cash		173480
(e)	Dec. 31, 2016	Cash	12800
		Interest Revenue		10409
		Debt Investments		2391
		(To record interest revenue.)
	Dec. 31, 2016	Unrealized Holding Gain or Loss - Equity	589
		Fair Value Adjustment		589
		(To record adjustment.)
(f)	Dec. 31, 2018	Cash	12800
		Interest Revenue		10113
		Debt Investments		2687
		(To record interest revenue.)
	Dec. 31, 2018	Unrealized Holding Gain or Loss - Equity	213
		Fair Value Adjustment		213