In: Accounting
Colah Company purchased $1,400,000 of Jackson, Inc., 7% bonds at par on July 1, 2021, with interest paid semi-annually. Colah determined that it should account for the bonds as an available-for-sale investment. At December 31, 2021, the Jackson bonds had a fair value of $1,640,000. Colah sold the Jackson bonds on July 1, 2022 for $1,260,000.
Required:
1. Prepare Colah’s journal entries for the
following transactions:
2. Complete the following table to show the effect of the Jackson bonds on Colah’s net income, other comprehensive income, and comprehensive income for 2021, 2022, and cumulatively over 2021 and 2022.
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