Homework Answers
(a)
| Account titles and explanation | Debit | Credit |
| Loss on Impairment($767,000 - $689,000) | $78,000 | |
| Debt Investments | $78,000 |
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Splish Corporation has municipal bonds classified as a held-to-maturity at December 31, 2020. These bonds have...
Oriole Corporation has municipal bonds classified as a held-to-maturity at December 31, 2017. These bonds have...
Oriole Corporation has municipal bonds classified as a held-to-maturity at December 31, 2017. These bonds have a par value of $826,000, an amortized cost of $826,000, and a fair value of $754,000. The company believes that impairment accounting is now appropriate for these bonds. Prepare the journal entry to recognize the impairment. (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...
Sunland Corporation has municipal bonds classified as a held-to-maturity at December 31, 2017. These bonds have...
Sunland Corporation has municipal bonds classified as a
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of $732,000, an amortized cost of $732,000, and a fair value of
$648,000. The company believes that impairment accounting is now
appropriate for these bonds.
Prepare the journal entry to recognize the impairment.
(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...
Bonita Corporation has municipal bonds classified as a held-to-maturity at December 31, 2017. These bonds have...
Bonita Corporation has municipal bonds classified as a held-to-maturity at December 31, 2017. These bonds have a par value of $730,000, an amortized cost of $730,000, and a fair value of $653,000. The company believes that impairment accounting is now appropriate for these bonds. Prepare the journal entry to recognize the impairment. What is the new cost basis of the municipal bonds? Given that the maturity value of the bonds is $730,000, should Bonita Corporation amortize the difference between the...
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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...
Splish Company has the following investments as of December 31, 2020: Investments in common stock of...
Splish Company has the following investments as of December 31, 2020: Investments in common stock of Laser Company $1,540,000 Investment in debt securities of FourSquare Company $3,590,000 In both investments, the carrying value and the fair value of these two investments are the same at December 31, 2020. Splish’s stock investments does not result in significant influence on the operations of Laser Company. Splish’s debt investment is considered held-to-maturity. At December 31, 2021, the shares in Laser Company are valued...
On January 1, 2020, Shamrock Company purchased at par 8% bonds having a maturity value of...
On January 1, 2020, Shamrock Company purchased at par 8% bonds having a maturity value of $250,000. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. The bonds are classified in the held-to-maturity category. (a) Prepare the journal entry at the date of the bond purchase. (b) Prepare the journal entry to record the interest revenue on December 31, 2020 (c) Prepare the journal entry to record the interest...
On January 1, 2020, Larkspur Company purchased at par 6% bonds having a maturity value of...
On January 1, 2020, Larkspur Company purchased at par 6% bonds having a maturity value of $390,000. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. The bonds are classified in the held-to-maturity category. (a) Prepare the journal entry at the date of the bond purchase. (b) Prepare the journal entry to record the interest revenue on December 31, 2020. (c) Prepare the journal entry to record the interest...
On January 1, 2020, Blue Company purchased 10% bonds having a maturity value of $420,000 for...
On January 1, 2020, Blue Company purchased 10% bonds having a maturity value of $420,000 for $453,537.42 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. Blue 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...
Splish Brothers Inc. issued 3,900, 7%, 5-year, $1,000 bonds dated January 1, 2020, at 100. Interest is paid each Januar...
Splish Brothers Inc. issued 3,900, 7%, 5-year, $1,000 bonds dated January 1, 2020, at 100. Interest is paid each January 1 Prepare the journal entry to record the sale of these bonds on January 1, 2020. (Cre dit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 SHOW LIST OF ACCOUNTS Prepare the adjusting journal entry on December 31, 2020, to record interest expense. (Credit account titles...
Exercise 17-03 On January 1, 2020, Hi and Lois Company purchased 12% bonds having a maturity...
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...
Oriole Corporation has municipal bonds classified as a held-to-maturity at December 31, 2017. These bonds have a par value of $826,000, an amortized cost of $826,000, and a fair value of $754,000. The company believes that impairment accounting is now appropriate for these bonds. Prepare the journal entry to recognize the impairment. (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...
Sunland Corporation has municipal bonds classified as a
held-to-maturity at December 31, 2017. These bonds have a par value
of $732,000, an amortized cost of $732,000, and a fair value of
$648,000. The company believes that impairment accounting is now
appropriate for these bonds.
Prepare the journal entry to recognize the impairment.
(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...
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, 2020, Shamrock Company purchased at par 8% bonds having a maturity value of $250,000. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. The bonds are classified in the held-to-maturity category. (a) Prepare the journal entry at the date of the bond purchase. (b) Prepare the journal entry to record the interest revenue on December 31, 2020 (c) Prepare the journal entry to record the interest...
On January 1, 2020, Larkspur Company purchased at par 6% bonds having a maturity value of $390,000. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. The bonds are classified in the held-to-maturity category. (a) Prepare the journal entry at the date of the bond purchase. (b) Prepare the journal entry to record the interest revenue on December 31, 2020. (c) Prepare the journal entry to record the interest...
On January 1, 2020, Blue Company purchased 10% bonds having a maturity value of $420,000 for $453,537.42 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. Blue 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...
Splish Brothers Inc. issued 3,900, 7%, 5-year, $1,000 bonds dated January 1, 2020, at 100. Interest is paid each January 1 Prepare the journal entry to record the sale of these bonds on January 1, 2020. (Cre dit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 SHOW LIST OF ACCOUNTS Prepare the adjusting journal entry on December 31, 2020, to record interest expense. (Credit account titles...
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...
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