Question

On January 1, 2017, Marin Company acquires $140,000 of Spiderman Products, Inc., 10% bonds at a price of $136,579. Interest is received on January 1 of each year, and the bonds mature on January 1, 2020. The investment will provide Marin Company a 11% yield. The bonds are classified as held-to-maturity.

Z Your answer is partially correct. Try again. Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the straight-lim Schedule of Interest Revenue and Bond Discount Amortization Straight-line Method Bond Purchased to Yield Interest Cash Bond Discount Carrying Amount Amortization Date Received Revenue of Bonds х 1/1/17 1/1/18 [14000 15024 1024 137603 1/1/19 138739 15136 14000 1136 140000 15261 1/1/20 14000 1261 X Your answer is incorrect. Try again. Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the effective-interes Schedule of Interest Revenue and Bond Discount Amortization Effective-Interest Method Bond Purchased to Yield Bond Discount Carrying Amount Amortization Cash Interest Revenue of Bonds Date Received 1/1/17 1/1/18 Ex 1/1/19 1/1/20 Your answer is partially correct. Try again. Prepare the journal entry for the interest revenue and discount amortization under the straight-line metho (c) Prepare the journal entry for the interest revenue and discount amortization under the effective-interest m (d)

Answer 1

Schedule of Interest Revenue and Bond Discount Amortization
Straight-line Method
Bond Purchased to Yield
Date	Cash Received	Interest Revenue	Bond Discount Amortization	Carrying Amount of Bonds
1/1/17	0	0	3421	136579
1/1/18	14000	15140	1140	137719
1/1/19	14000	15140	1140	138860
1/1/20	14000	15140	1140	140000
Schedule of Interest Revenue and Bond Discount Amortization
Effective-Interest Method
Bond Purchased to Yield
Date	Cash Received	Interest Revenue	Bond Discount Amortization	Carrying Amount of Bonds
1/1/17	0	0	3421	136579
1/1/18	14000	15024	1024	137603
1/1/19	14000	15136	1136	138739
1/1/20	14000	15261	1261	140000

No.	Account Titles and Explanation	Debit	Credit
(c)	Interest receivable	14000
	Debt investments	1140
	Interest revenue		15140
(d)	Interest receivable	14000
	Debt investments	1136
	Interest revenue		15136