Question
In: Accounting
Splish Company invests $10,400,000 in 5% fixed rate corporate bonds on January 1, 2017. All the...
Splish Company invests $10,400,000 in 5% fixed rate corporate
bonds on January 1, 2017. All the bonds are classified as
available-for-sale and are purchased at par. At year-end, market
interest rates have declined, and the fair value of the bonds is
now $11,078,000. Interest is paid on January 1.
Prepare journal entries for Splish Company to (a) record the
transactions related to these bonds in 2017, assuming Splish does
not elect the fair option; and (b) record the transactions related
to these bonds in 2017, assuming that Splish Company elects the
fair value option to account for these bonds. (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. |
Date |
Account Titles and Explanation |
Debit |
Credit |
| (a) |
Jan. 1, 2017Dec. 31, 2017 |
|||
|
Jan. 1, 2017Dec. 31, 2017 |
||||
|
(To record interest revenue) |
||||
|
(To record fair value adjustment) |
|
No. |
Date |
Account Titles and Explanation |
Debit |
Credit |
| (b) |
Jan. 1, 2017Dec. 31, 2017 |
|||
|
Jan. 1, 2017Dec. 31, 2017 |
||||
|
(To record interest revenue) |
||||
|
(To record fair value adjustment) |
Solutions
ekkarill92 answered 8 months agoRelated Solutions
The Splish Company issued $210,000 of 9% bonds on January 1, 2017. The bonds are due...
The Splish Company issued $210,000 of 9% bonds on January 1,
2017. The bonds are due January 1, 2022, with interest payable each
July 1 and January 1. The bonds were issued at 96.
Prepare the journal entries for (a) January 1, (b) July 1, and (c)
December 31. Assume The Splish Company records straight-line
amortization semiannually. (If no entry is required,
select "No Entry" for the account titles and enter 0 for the
amounts. Credit account titles are automatically...
Coronado Company issues $26000000, 5%, 5-year bonds dated January 1, 2017 on January 1, 2017. The...
Coronado Company issues $26000000, 5%, 5-year bonds dated
January 1, 2017 on January 1, 2017. The bonds pay interest
semiannually on June 30 and December 31. The bonds are issued to
yield 4%. What are the proceeds from the bond issue?
Answers given:
$27156209
$26000000
$27167784
$27160279
Question 5 On January 1, 2020, Splish Company purchased $350,000, 8% bonds of Aguirre Co. for...
Question 5
On January 1, 2020, Splish Company purchased $350,000, 8% bonds
of Aguirre Co. for $322,973. The bonds were purchased to yield 10%
interest. Interest is payable semiannually on July 1 and January 1.
The bonds mature on January 1, 2025. Splish Company uses the
effective-interest method to amortize discount or premium. On
January 1, 2022, Splish Company sold the bonds for $324,733 after
receiving interest to meet its liquidity needs.
(e)
Prepare the journal entry to record the...
Question 5 On January 1, 2020, Splish Company purchased $350,000, 8% bonds of Aguirre Co. for...
Question 5
On January 1, 2020, Splish Company purchased $350,000, 8% bonds
of Aguirre Co. for $322,973. The bonds were purchased to yield 10%
interest. Interest is payable semiannually on July 1 and January 1.
The bonds mature on January 1, 2025. Splish Company uses the
effective-interest method to amortize discount or premium. On
January 1, 2022, Splish Company sold the bonds for $324,733 after
receiving interest to meet its liquidity needs.
Prepare the journal entry to record the purchase...
On january 1, 2017, A company issued 12% stated rate bonds with a face amount of...
On january 1, 2017, A company issued 12% stated rate bonds with a face amount of $200 million. The bonds mature on january 1, 2027 and market rate was 14%.
Please answer the following:
1.n=
2.i=
3.Total present value of interest payment=
4.Total present value of principal=
5.Total price of bonds=
On January 1, 2017, Albany Company issued 8% bonds dated January 1, 2017, with a face...
On January 1, 2017, Albany Company issued 8% bonds dated January
1, 2017, with a face amount of $10 million. The bonds mature
January 1, 2027 (10 years). For bonds of similar risk and maturity,
the market yield is 10%. Interest is paid semiannually on June 30
and December 31.
Required:
Determine the price of the bonds at January 1, 2017. You must
show all of the steps to receive full credit.
Prepare the journal entry to record...
On January 1, 2017, Bishop Company issued 12% bonds dated January 1, 2017, with a face...
On January 1, 2017, Bishop Company issued 12% bonds dated
January 1, 2017, with a face amount of $20 million. The bonds
mature in 10 years. For bonds of similar risk and maturity, the
market yield is 10%. Interest is paid semiannually on June 30 and
December 31.
1. Determine the price of the bonds at January 1,
2017
2. Prepare the journal entry to record the bond issuance
by Bishop on January 1, 2017.
3. Prepare the journal entry...
Link Company acquired Tuna Inc. on January 1, 2017. On January 1, 2017 all of Tuna's...
Link Company acquired Tuna Inc. on January 1, 2017. On January
1, 2017 all of Tuna's assets and liabilities had a FVs = BV except
for the following:
Land was undervalued by $30,000
Buildings were overvalued by $45,000 (20-yr remaining useful
life)
Equipment was undervalued by $90,000 (5-yr remaining useful
life)
In addition, Tuna had internally developed a customer list with
an appraised value of $150,000 and a 10-yr remaining useful life.
Link originally acquired Tuna at the FV of...
Splish Company sells one product. Presented below is information for January for Splish Company. Jan. 1...
Splish Company sells one product. Presented below is
information for January for Splish Company.
Jan. 1
Inventory
124
units at $4 each
4
Sale
100
units at $8 each
11
Purchase
162
units at $7 each
13
Sale
134
units at $9 each
20
Purchase
151
units at $7 each
27
Sale
96
units at $11 each
Splish uses the FIFO cost flow assumption. All purchases and sales
are on account.
Assume Splish uses a perpetual system. Prepare all necessary...
Splish Company sells one product. Presented below is information for January for Splish Company. Jan. 1...
Splish Company sells one product. Presented below is information
for January for Splish Company.
Jan. 1
Inventory
124
units at $4 each
4
Sale
100
units at $8 each
11
Purchase
162
units at $7 each
13
Sale
134
units at $9 each
20
Purchase
151
units at $7 each
27
Sale
96
units at $11 each
Splish uses the FIFO cost flow assumption. All purchases and sales
are on account.
Your answer is partially correct. Try again.
Assume Splish...
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