Question

N U E Titles and Explanation Debit Crexit Jan. 1, 2070 Bond Investment at Amortized Cost 1160783.82 81 160783.82 136750 19681.25 June 30, 2020 Cash Trond Investment at Amortized Cost interest Income Oct. 31, 2020 Interest Receivable Thond Investment at Amortired Cost 716431.25 24500 6712.41 interest Income 11242.41 Dec. 31, 2020-Cash 36750 Bond Investment at Amortized Cost 5712, 415 522654.12 Interest Receivable interest Income Dec 31, 2017 Cash 36750 Bond Investment at Amortized Cost 11778.85 Interest Income 1528.85 DE Gain on Sale of Investments (To record collection of interest.) Dec 31, 2022 Cash Bond Investment at Amortized Cost (To record maturity of bond.) 1:22:00 22:00

Stuck on the red boxes and the very first PV outlined in Grey.

Answer 1

half yearly interest= 1225000*6%*1/2 = 36750
Purchase Price= interest*PVIFA(4%,6)+Principle*PVIF(4%,6)
Purchase Price= 36750*5.2421+1225000*0.7903=1160764.68 or 1160783.82
1)The price paid for the bond OR PV = $1160783.82
2)The amortisation schedule for the bond is correct
3)Journal entry:
Date	Accounts Title	Debit $	Credit $
1-Jan-20	Bond investment at Amortised Cost	1160783.82
	Cash		1160783.82
	(being purchase of bond at discount)
on Oct 31, 2020: Interest due for 3 months only, therefor journal entry would be:
31-Oct-20	Interest receivable	18375		(36750/2)
	Bond investment at Amortised Cost	5034.31		(10068.61/2)
	Interest income		23409.31	(balancing figure)
	(to record the interest due)
31-Dec-20	Cash	36750		Cash payment of interest
	Bond investment at Amortised Cost	5034.31		(10068.61/2)
	Interest receivable		18375	(contra)
	Interest income		23409.31	(balancing figure)
	(to record the interest receipt)
31-Dec-22	Cash	36750		Cash payment of interest
	Bond investment at Amortised Cost	5889.43		(11778.85/2)
	Interest receivable		18375	(contra)
	Interest income		24264.43	(balancing figure)
	(to record the interest receipt)
31-Dec-22	Cash	1225000
	Bond investment at Amortised Cost		1225000
	(to record the receipt of principle at maturity)