REQUIRED 1 : | |||
Date | Account titles and explanation | Debit | Credit |
Jan 1,2017 | Debt investments ( Held-to -Maturity ) | $ 303,589.66 | |
Cash | $ 303,589.66 | ||
( to record purchase of bonds at premium ) |
REQUIRED 2 : | ||||
Schedule of interest Revenue and bond premium amortization | ||||
Effective - interest Method | ||||
Date | Cash received | Interest revenue | Premium Amortized | Carrying amount of bonds |
01-01-2017 | $ 303,589.66 | |||
01-01-2018 | $ 22,400 {$280,000 *8 %} | $ 18,215.38 {$303,589.66*6%} | $ 4,184.62 {$ 22,400 - $ 18,215.38} | $ 299,405.04 {$303,589.66 - $ 4,184.62} |
01-01-2019 | $ 22,400 {$280,000 *8 %} | $ 17,964.30 {$299,405.04*6%} | $ 4,435.70 {$ 22,400 -$ 17,964.30} | $ 294,969.34 {$299,405.04 -$ 4,435.70} |
01-01-2020 | $ 22,400 {$280,000 *8 %} | $ 17,698.16 {$ 294,969.34 *6%} | $ 4,701.84 {$22,400 - $ 17,698.16 } | $ 290,267.50 {$294,969.34 -$ 4,701.84} |
01-01-2021 | $ 22,400 {$280,000 *8 %} | $ 17,416.05 {$290,267.50 *6 % } | $ 4,983.95 {$22,400 -$ 17,416.05} | $ 285,283.55 {$ 290,267.50 - $ 4,983.95} |
01-01-2022 | $ 22,400 {$280,000 *8 %} | $ 17,117.01 {$ 285,283.55* 6% } | $ 5,282.99 {$ 22,400 - $ 17,117.01} | $ 280,000.56 {$ 285,283.55 -$5282.99} |
REQUIRED 3 : | |||
Date | Account titles and explanation | Debit | Credit |
Dec 31,2017 | Cash | $ 22,400 | |
Debt investments ( Held-to -Maturity ) | $ 4,184.62 | ||
Interest Revenue | $ 18,215.38 | ||
(To record interest revenue and amortization at Dec 31,2017) | |||
REQUIRED 4 : | |||
Date | Account titles and explanation | Debit | Credit |
Dec 31,2018 | Cash | $ 22,400 | |
Debt investments ( Held-to -Maturity ) | $ 4,435.70 | ||
Interest Revenue | $ 17,964.30 | ||
(To record interest revenue and amortization at Dec 31,2018) |
Exercise 17-3 On January 1, 2017, Bonita Company purchased 9% bonds having a maturity value of...
On January 1, 2017, Metlock Company purchased 9% bonds having a maturity value of $210,000 for $227,221 68. The bonds provide the bondholders th a 7% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest receivable January 1 of each year. Metlock Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category Prepare the journal entry at the date of the bond purchase. (Enter answers to...
*Exercise 17-03 On January 1, 2020, Carla Company purchased 8% bonds having a maturity value of $400,000, for $433,699.52. The bonds provide the bondholders with a 6% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Carla Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category. Prepare the journal entry at the date of the bond purchase. (Enter...
Exercise 17-03 On January 1, 2020, Hi and Lois Company purchased 12% bonds having a maturity value of $300,000, for $322,744.44. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Hi and Lois Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category. Prepare the journal entry at the date of...
On January 1, 2020, Splish Company purchased 12% bonds having a maturity value of $350,000, for $376,535.18. The bonds provide the bondholders with a 10% 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. Prepare the journal entry at the date of the bond purchase. (Enter answers to...
On January 1, 2017, Concord Company purchased 12% bonds having a maturity value of $390,000, for $419,567.77. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest receivable January 1 of each year. Concord Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category Prepare the journal entry at the date of the bond purchase. (Enter answers to 2...
On January 1, 2020, Headland Company purchased 9% bonds having a maturity value of $410,000, for $443,623.28. 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. Headland 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. (Enter answers...
On January 1, 2020, Bridgeport Company purchased 12% bonds having a maturity value of $270,000, for $290,470.00. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Bridgeport Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category. Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 2,525.25.) Schedule...
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On January 1, 2020, Monty Company purchased 10% bonds having a maturity value of $260,000, for $280,761.26. The bonds 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. Monty Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category. 1. Prepare the journal entry at the date of the bond purchase. (Enter answers...
On January 1 2017, Headland Company sold 12% bonds having a maturity value of $ 410,000 for $. 441,084, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2017, and mature January 1 2022 with interest payable December 31 of each year. Headland Company allocates interest and unamortized discount or premium on the effective-interest basis. Prepare the journal entry at the date of the bond issuance. (Round answer to O decimal places, e.g. 38,548. If...