ZuoTi.Pro
Question

Problem 9-3 The following amortization schedule is for Martinez Ltd.s investment in Spangler Corps $75,000, five-year bonds with a 7% interest rate and a 5% yield, which were purchased on December 31, 2016, for $81,494 Bond Premium Amortized Amortized Cost of Bonds Cash Interest Received Income Dec. 31, 2016 $81,494 Dec. 31, 2017$5,250 5,250 5,250 5,250 5,250 Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021 $4,075 4,016 3,954 3,889 3,821 $1,175 1,234 1,296 1,361 1,428 80,319 79,085 77,789 76,428 75,000 The following schedule presents a comparison of the amortized cost and fair value of the bonds at year end: Dec. 31, 2017 $80,319 $79,739 Dec. 31, 2018 $79,085 $81,105 Dec. 31, 2019 $77,789 $79,709 Dec. 31, 2020 $76,428 $77,513 Dec. 31, 2021 $75,000 $75,000 Amortized cost Fair value Assume that Martinez Ltd. follows IFRS 9 and reports interest income separately from other investment income, except for trading investments accounted for at FV-NI

Prepare the ournal entry to record the purchase o these bonds on December 31 2016, assuming the bonds are accounted rusin t ea mortize co od ed account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select No Entry for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Prepare the journal entry related to the bonds accounted for using the amortized cost model for 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select No Entry for the account titles and enter 0 for the amounts. Round answers to 0 decimal places e.g. 5,275.) Date Account Titles and Explanation Debit Credit Dec. 31

Prepare the journal entry related to the bonds accounted for using the amortized cost model for 2019. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select No Entry for the account titles and enter O for the amounts. Round answers to O decimal places, e.g.5,275.) Date Account Titles and Explanation Debit Credit Dec. 31 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Prepare the journal entry to record the purchase of these bonds, assuming they are held for trading purposes and accounted for using the FV-NI model. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select No Entry for the account titles and enter 0 for the amounts. Round answers to O decimal places, e.g. 5,275) Date Account Titles and Explanation Debit Credit Dec. 31

Prepare the journal entry(ies) related to the trading bonds accounted for using the FV-NI model for 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select No Entry for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Dec. 31 (To record interest.) Dec. 31 (To record investment income or loss.)

Prepare the journal entry(ies) related to the trading bonds accounted for using the FV-NI model for 2019. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select No Entry for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275. Date Account Titles and Explanation Debit Credit Dec. 31 (To record interest.) Dec. 31 (To record investment income or loss.)

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Answer: 1) Prepare the journal entry to record the purchase of these bonds on December 31 2016, assuming the bonds are accounted for using the amortized cost model Datc Dec.3 Bond Investment at Amortized Cost Account Titles and Explanation Debit Credit 81,494 as 81.494 To Record the purchase of bonds 2) Prepare the journal entry(ies) related to the bonds accounted for using the amortized cost model for 2017 DebitCredit Date Dec.3 Cash Account Titles and Explanation 5,250 Bond Investment at Amortized Cost Interest Income 1,175 4.075 To record the bonds accounted for 2017 3) Prepare the journal entry(ies) related to the bonds accounted for using the amortized cost model for 2019 Date Account Titles and Explanation Debit Credit Dec.31 Cash 5,250 Bond Investment at Amortized Cost 1,296 3.954 Interest Income To record the bonds accounted for 2019 Created by Universal Document Converter4) Prepare the journal entry(ies) to record the purchase of these bonds, assuming they are held for trading purposes and accounted for using the FV-NI model Date Dec.3 FV-NI Investments Account Titles and Explanation DebitCredit 81,494 Cash To Record the purchase of bonds 81.494 5) Prepare the journal entry(ies) related to the trading bonds accounted for using the FV-NI model for 2017 Date Dec 31 Cash Account Titles and Explanation Debi Credit 5,250 Investment Income or Loss To record interest 5,250 Dec.31 Investment Income or Loss 1.755 FV-NI Investments ($81,494 - $79,739) To record Investment Income or Loss 1,755 6) Prepare the journal entry(ies) related to the trading bonds accounted for using the FV-NI model for 2019 Date Dec.3 Cash Account Titles and Explanation DebiCredit 5,250 Investment Income or Loss 5,250 [To record interest] Investment Income or Loss Dec.31 1.396 1,396 FV-NI Investments ($81,105 - $79,709) To record Investment Income or Loss Created by Universal Document Converter

0 0
Add a comment
Know the answer?
Add Answer to:
Problem 9-3 The following amortization schedule is for Martinez Ltd.'s investment in Spangler Corp's $75,000, five-year...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Problem 9-3 The following amortization schedule is for Ayayai Ltd.'s investment in Spangler Corp.'s $102,500, five-year...

    Problem 9-3 The following amortization schedule is for Ayayai Ltd.'s investment in Spangler Corp.'s $102,500, five-year bonds with a 13% interest rate and a 11% yield, which were purchased on December 31, 2019, for $110,184: Cash Received Interest Income Bond Premium Amortized Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2022 Dec 31, 2023 Dec. 31. 2024 $13,338 13,338 13,338 13,338 13,338 $12,120 11,986 11,838 11,673 11,489 $1,218 1,352 1,500 1,665 1,849 Amortized Cost of Bonds $110,184...

  • 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,...

  • The following amortization schedule is for Sheffield Ltd.'s investment in Spangler Corp.'s $103,600, five-year bonds with...

    The following amortization schedule is for Sheffield Ltd.'s investment in Spangler Corp.'s $103,600, five-year bonds with a 10% interest rate and a 8% yield, which were purchased on December 31, 2019, for $111,873 Bond Premium Amortized Cash Received Amortized Cost Interest of Bonds $111,873 110,463 108,940 107,295 Income Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021i Dec. 31, 2022 $10,360 10,360 10,360 10,360 10,360 $8,950 8,837 $1,410 1,523 1,645 8,715 8,584 8,442 Dec. 31, 2023 1,776 105,519 Dec. 31,...

  • Exercise 9-11 Bramble Corporation made the following purchases of investments during 2017, the first year in...

    Exercise 9-11 Bramble Corporation made the following purchases of investments during 2017, the first year in which Bramble invested in equity securities: 1. On January 15, purchased 8,640 shares of Nirmala Corp.s common shares at $32.16 per share plus commission of $1,901 2. On April 1, purchased 4,800 shares of Oxana Corp.'s common shares at $50 per share plus commission of $3,235. 3. On September 10, purchased 6,720 shares of WTA Corp.s preferred shares at $25.44 per share plus commission...

  • 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...

  • Kingbird, Inc. issued $480,000, 596, 20-year bonds on January 1, 2019, at 101. Interest is payable annually on January 1. Kingbird uses straight-line amortization for bond premium or discount. Prepar...

    Kingbird, Inc. issued $480,000, 596, 20-year bonds on January 1, 2019, at 101. Interest is payable annually on January 1. Kingbird uses straight-line amortization for bond premium or discount. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 Prepare the journal entry to record the accrual of interest and the premium amortization on December 31,2019....

  • Brief Exercise 12-2 On January 1, 2018, Marshall Ltd. purchased $221,000 of 9 , 10-year bonds...

    Brief Exercise 12-2 On January 1, 2018, Marshall Ltd. purchased $221,000 of 9 , 10-year bonds at face value (100) with the intention of selling the bonds early the next year. Interest is received semi-annually only 1 and January 1. At December 31, 2018, which is the company's fiscal year end, the bonds were trading in the market at 95 (this means 95% of maturity value) Using the fair value through profit or loss model, prepare the journal entry to...

  • On January 1, 2020, Sandhill Company issued $310,500, 9%, 5-year bonds at face value. Interest is...

    On January 1, 2020, Sandhill Company issued $310,500, 9%, 5-year bonds at face value. Interest is payable annually on January 1. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1, 2020 Prepare the journal entry to record the accrual of interest on December 31, 2020. (Credit account titles are automatically indented when amount is entered....

  • Exercise 10-9 On January 1, 2017, Forrester Company issued $351,500, 9%, 5-year bonds at face value....

    Exercise 10-9 On January 1, 2017, Forrester Company issued $351,500, 9%, 5-year bonds at face value. Interest is payable annually on January 1. (a) Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation Jan. 1 (b) Prepare the journal entry to record the accrual of interest on December 31, 2017. (Credit account titles are automatically indented when...

  • On August 1, 2022, Sarasota Corp. issued $496,800, 9%, 10-year bonds at face value. Interest is...

    On August 1, 2022, Sarasota Corp. issued $496,800, 9%, 10-year bonds at face value. Interest is payable annually on August 1. Sarasota's year-end is December 31. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Aug. 1 Prepare the journal entry to record the accrual of interest on December 31, 2022. (Credit account titles are automatically indented...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
Active Questions
ADVERTISEMENT