Carla Company purchased, on January 1, 2017, as a held-to-maturity investment, $66,000 of the 8%, 5-year...
Carla Company purchased, on January 1, 2017, as a
held-to-maturity investment, $66,000 of the 8%, 5-year bonds of
Chester Corporation for $60,996, which provides an 10%
return.
Prepare Carla’s journal entries for (a) the purchase of the
investment, and (b) the receipt of annual interest and discount
amortization. Assume effective-interest amortization is used.
(Round answers to 0 decimal places, e.g. 1,225. Credit
account titles are automatically indented when 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.)
|
No. |
Account Titles and Explanation |
Debit |
Credit |
|
(a) |
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(b) |
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Homework Answers
| No. | Account Titles and Explanation | Debit | Credit | |
| (a) | Held-to-Maturity Securities | $60,996 | ||
| Cash | $60,996 | |||
| (b) | Cash | $5,280 | ($66,000 x 8%) | |
| Held-to-Maturity Securities | $820 | |||
| Interest Revenue | $6,100 | ($60,996 x 10%) | ||
Add Answer to:
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