Homework Answers
Solving first four journal entries:
| Debit | Credit | |||
| $ | $ | |||
| 1. To record the purchase of bond at premium (held to maturity) | ||||
| 31-12-2018 | Investment in bonds Dr | 150000 | ||
| Premium on bonds Dr | 13356 | |||
| To cash | 163356 | |||
| 2. To record interest on bond and amortisation of premium | ||||
| 31-12-2019 | Cash A/c Dr | 9000 | ||
| To Interest income | 6534 | |||
| To Premium on bonds | 2466 | |||
| 3. To record interest on bond and amortisation of premium | ||||
| 31-12-2021 | Cash A/c Dr | 9000 | ||
| To Interest income | 6333 | |||
| To Premium on bonds | 2667 | |||
| 4. To record the purchase of bond at premium (available for sale) | ||||
| 31-12-2018 | Investment in bonds Dr | 163356 | ||
| To cash | 163356 | |||
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Presented below is an amortization schedule related to Buffalo Company's 5-year, $150,000 bond with a 6%...
Presented below is an amortization schedule related to Culver Company’s 5-year, $150,000 bond with a 7%...
Presented below is an amortization schedule related to Culver Company’s 5-year, $150,000 bond with a 7% interest rate and a 4% yield, purchased on December 31, 2018, for $170,034. Date Cash Received Interest Revenue Bond Premium Amortization Carrying Amount of Bonds 12/31/18 $170,034 12/31/19 $10,500 $6,801 $3,699 166,335 12/31/20 10,500 6,653 3,847 162,488 12/31/21 10,500 6,500 4,000 158,488 12/31/22 10,500 6,340 4,160 154,328 12/31/23 10,500 6,172 4,328 150,000 The following schedule presents a comparison of the amortized cost and fair...
Presented below is an amortization schedule related to Martinez Company's 5-year, $140,000 bond with a 6%...
Presented below is an amortization schedule related to Martinez Company's 5-year, $140,000 bond with a 6% interest rate and a 3% yield, purchased on December 31, 2018, for $159,235. Cash Received Interest Revenue Bond Premium Amortization Carrying Amount of Bonds Date 12/31/18 $159,235 12/31/19 $8,400 $4,777 $3,623 155,612 12/31/20 8,400 4,668 3,732 151,880 12/31/21 8,400 4,556 3,844 148,036 12/31/22 8,400 4,441 3,959 144,077 12/31/23 8,400 4,323 4,077 140,000 The following schedule presents a comparison of the amortized cost and fair...
Problem 17-01 Presented below is an amortization schedule related to Buffalo Company's 5-year, $180,000 bond with...
Problem 17-01 Presented below is an amortization schedule related to Buffalo Company's 5-year, $180,000 bond with a 6% interest rate and a 3% yield, purchased on December 31, 2018, for $204,731. Cash Interest Received Revenue Bond Premium Amortization Date 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 $10,800 10,800 10,800 10,800 10,800 $6,142 6,002 5,858 5,710 5,557 $4,658 4,798 4,942 5,090 5,243 Carrying Amount of Bonds $204,731 200,073 195,275 190,333 185,243 180,000 The following schedule presents a comparison of the amortized cost...
Presented below is an amortization schedule related to Blue Company’s 5-year, $110,000 bond with a 6%...
Presented below is an amortization schedule related to Blue Company’s 5-year, $110,000 bond with a 6% interest rate and a 4% yield, purchased on December 31, 2015, for $119,794. Date Cash Received Interest Revenue Bond Premium Amortization Carrying Amount of Bonds 12/31/15 $119,794 12/31/16 $6,600 $4,792 $1,808 117,986 12/31/17 6,600 4,719 1,881 116,105 12/31/18 6,600 4,644 1,956 114,149 12/31/19 6,600 4,566 2,034 112,115 12/31/20 6,600 4,485 2,115 110,000 The following schedule presents a comparison of the amortized cost and fair...
Problem 17-1 Presented below is an amortization schedule related to Kingbird Company's 5-year, $110,000 bond with...
Problem 17-1 Presented below is an amortization schedule related to Kingbird Company's 5-year, $110,000 bond with a 8% interest rate and a 5 % yield , purchased on December 31, 2015, for $124,287 Carrying Bond Premium Cash Interest Amount Received of Bonds Date Revenue Amortization 12/31/15 $124,287 12/31/16 $8,800 $6,214 $2,586 121,701 8,800 6,085 2,715 118,986 12/31/17 12/31/18 2,851 8,800 5,949 116,135 12/31/19 8,800 5,807 2,993 113,142 8,800 110,000 12/31/20 5,658 3,142 The following schedule presents a comparison of the...
Presented below is an amortization schedule related to Flounder Company's 5-year, $170,000 bond with a 7%...
Presented below is an amortization schedule related to Flounder Company's 5-year, $170,000 bond with a 7% interest rate and a 4% yield, purchased on December 31, 2015, for $192,705. Cash Interest Received Revenue Bond Premium Amortization Date 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 $11,900 11,900 11,900 11,900 11,900 $7,708 7,541 7,366 7,185 6,995 $4,192 4,359 4,534 4,715 4,905 Carrying Amount of Bonds $192,705 188,513 184,154 179,620 174,905 170,000 The following schedule presents a comparison of the amortized cost and fair...
Problem 17-1 Presented below is an amortization schedule related to Riverbed Company's 5-year $160,000 bond with...
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...
HW 17-7-Debt Securities AS CORRECTED Presented below is an amortization schedue related to the Orlando Magic's...
HW 17-7-Debt Securities AS CORRECTED Presented below is an amortization schedue related to the Orlando Magic's 5 year, $200,000 bond with a 5% interest rate and a 5% yield, purchased on December 31, 2018 for $191,575. Bond Discount Carrying Amount Date Cash Received Interest Revenue Amortization of Bond 12/31/2018 191,575 12/31/2019 10,000 11,495 1,495 193,070 12/31/2020 10,000 11,584 1,584 194,654 12/31/2021 10,000 11,679 1,679 196,333 12/31/2022 10,000 11,780 1,780 198,113 12/31/2023 10,000 11,887 1,887 200,000 Instructions (a) Prepare the journal...
Problem 17-04 Presented below is information taken from a bond investment amortization schedule with related fair...
Problem 17-04 Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale. Amortized cost Fair value 12/31/20 $533,200 $539,200 1 2/31/21 $477,000 $465,900 12/31/22 $531,700 $531,700 (a) Indicate whether the bonds were purchased at a discount or at a premium. (b) Prepare the adjusting entry to record the bonds at fair value at December 31, 2020. The Fair Value Adjustment account has a debit balance of $1,000 prior...
Problem 9-3 The following amortization schedule is for Monty Ltd.’s investment in Spangler Corp.’s $107,200, five-year...
Problem 9-3 The following amortization schedule is for Monty Ltd.’s investment in Spangler Corp.’s $107,200, five-year bonds with a 10% interest rate and a 8% yield, which were purchased on December 31, 2019, for $115,760: Cash Received Interest Income Bond Premium Amortized Amortized Cost of Bonds Dec. 31, 2019 $115,760 Dec. 31, 2020 $10,720 $9,261 $1,459 114,301 Dec. 31, 2021 10,720 9,144 1,576 112,725 Dec. 31, 2022 10,720 9,018 1,702 111,023 Dec. 31, 2023 10,720 8,882 1,838 109,185 Dec. 31,...
Presented below is an amortization schedule related to Martinez Company's 5-year, $140,000 bond with a 6% interest rate and a 3% yield, purchased on December 31, 2018, for $159,235. Cash Received Interest Revenue Bond Premium Amortization Carrying Amount of Bonds Date 12/31/18 $159,235 12/31/19 $8,400 $4,777 $3,623 155,612 12/31/20 8,400 4,668 3,732 151,880 12/31/21 8,400 4,556 3,844 148,036 12/31/22 8,400 4,441 3,959 144,077 12/31/23 8,400 4,323 4,077 140,000 The following schedule presents a comparison of the amortized cost and fair...
Problem 17-01 Presented below is an amortization schedule related to Buffalo Company's 5-year, $180,000 bond with a 6% interest rate and a 3% yield, purchased on December 31, 2018, for $204,731. Cash Interest Received Revenue Bond Premium Amortization Date 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 $10,800 10,800 10,800 10,800 10,800 $6,142 6,002 5,858 5,710 5,557 $4,658 4,798 4,942 5,090 5,243 Carrying Amount of Bonds $204,731 200,073 195,275 190,333 185,243 180,000 The following schedule presents a comparison of the amortized cost...
Problem 17-1 Presented below is an amortization schedule related to Kingbird Company's 5-year, $110,000 bond with a 8% interest rate and a 5 % yield , purchased on December 31, 2015, for $124,287 Carrying Bond Premium Cash Interest Amount Received of Bonds Date Revenue Amortization 12/31/15 $124,287 12/31/16 $8,800 $6,214 $2,586 121,701 8,800 6,085 2,715 118,986 12/31/17 12/31/18 2,851 8,800 5,949 116,135 12/31/19 8,800 5,807 2,993 113,142 8,800 110,000 12/31/20 5,658 3,142 The following schedule presents a comparison of the...
Presented below is an amortization schedule related to Flounder Company's 5-year, $170,000 bond with a 7% interest rate and a 4% yield, purchased on December 31, 2015, for $192,705. Cash Interest Received Revenue Bond Premium Amortization Date 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 $11,900 11,900 11,900 11,900 11,900 $7,708 7,541 7,366 7,185 6,995 $4,192 4,359 4,534 4,715 4,905 Carrying Amount of Bonds $192,705 188,513 184,154 179,620 174,905 170,000 The following schedule presents a comparison of the amortized cost and fair...
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...
HW 17-7-Debt Securities AS CORRECTED Presented below is an amortization schedue related to the Orlando Magic's 5 year, $200,000 bond with a 5% interest rate and a 5% yield, purchased on December 31, 2018 for $191,575. Bond Discount Carrying Amount Date Cash Received Interest Revenue Amortization of Bond 12/31/2018 191,575 12/31/2019 10,000 11,495 1,495 193,070 12/31/2020 10,000 11,584 1,584 194,654 12/31/2021 10,000 11,679 1,679 196,333 12/31/2022 10,000 11,780 1,780 198,113 12/31/2023 10,000 11,887 1,887 200,000 Instructions (a) Prepare the journal...
Problem 17-04 Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale. Amortized cost Fair value 12/31/20 $533,200 $539,200 1 2/31/21 $477,000 $465,900 12/31/22 $531,700 $531,700 (a) Indicate whether the bonds were purchased at a discount or at a premium. (b) Prepare the adjusting entry to record the bonds at fair value at December 31, 2020. The Fair Value Adjustment account has a debit balance of $1,000 prior...
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