Question

In: Accounting

On January 1, 2017, Grouper Company purchased 11% bonds, having a maturity value of $313,000, for...

On January 1, 2017, Grouper Company purchased 11% bonds, having a maturity value of $313,000, for $337,348.74. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest received on January 1 of each year. Grouper Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows.

2017 $335,100 2020 $322,600
2018 $321,600 2021 $313,000
2019 $320,500

(a) Prepare the journal entry at the date of the bond purchase.
(b) Prepare the journal entries to record the interest revenue and recognition of fair value for 2017.
(c) Prepare the journal entry to record the recognition of fair value for 2018.

Solutions

Expert Solution


Related Solutions

On January 1, 2017, Grouper Company purchased 12% bonds, having a maturity value of $316000 for...
On January 1, 2017, Grouper Company purchased 12% bonds, having a maturity value of $316000 for $339957.48. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2017 and mature January 1, 2022, with interest received on January 1 of each year. Grouper Company uses the effective interest method to allocate unamortized discount or premium. The bonds are classified as available for sale category. The fair value of the bonds at Decemeber 31 of each year...
On January 1, 2017, Bridgeport Company purchased 11% bonds, having a maturity value of $274,000, for...
On January 1, 2017, Bridgeport Company purchased 11% bonds, having a maturity value of $274,000, for $295,314.87. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest received on January 1 of each year. Bridgeport Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows....
On January 1, 2017, Bonita Company purchased 11% bonds, having a maturity value of $314,000, for...
On January 1, 2017, Bonita Company purchased 11% bonds, having a maturity value of $314,000, for $338,426.53. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest received on January 1 of each year. Bonita Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows....
On January 1, 2017, Sage Company purchased 11% bonds, having a maturity value of $328,000, for...
On January 1, 2017, Sage Company purchased 11% bonds, having a maturity value of $328,000, for $353,515.61. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest received on January 1 of each year. Sage Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows....
On January 1, 2017, Carla Company purchased 11% bonds, having a maturity value of $274,000, for...
On January 1, 2017, Carla Company purchased 11% bonds, having a maturity value of $274,000, for $295,314.87. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest received on January 1 of each year. Carla Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows....
On January 1, 2017, Skysong Company purchased 11% bonds, having a maturity value of $274,000, for...
On January 1, 2017, Skysong Company purchased 11% bonds, having a maturity value of $274,000, for $295,314.87. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest received on January 1 of each year. Skysong Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows....
On January 1, 2017, Carla Company sold 11% bonds having a maturity value of $480,000 for...
On January 1, 2017, Carla Company sold 11% bonds having a maturity value of $480,000 for $537,493, which provides the bondholders with a 8% yield. The bonds are dated January 1, 2017, and mature January 1, 2022, with interest payable December 31 of each year. Carla Company allocates interest and unamortized discount or premium on the effective-interest basis.    Prepare the journal entry at the date of the bond issuance. (Round answer to 0 decimal places, e.g. 38,548. If no...
On January 1, 2020, Sheridan Company purchased 11% bonds, having a maturity value of $301,000 for...
On January 1, 2020, Sheridan Company purchased 11% bonds, having a maturity value of $301,000 for $324,415.24. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Sheridan Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows....
On January 1, 2020, Oriole Company purchased 11% bonds, having a maturity value of $328,000 for...
On January 1, 2020, Oriole Company purchased 11% bonds, having a maturity value of $328,000 for $353,515.61. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Oriole Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows....
On January 1, 2020, Flounder Company purchased 11% bonds, having a maturity value of $320,000 for...
On January 1, 2020, Flounder Company purchased 11% bonds, having a maturity value of $320,000 for $344,893.28. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Flounder Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows....
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT