On July 1, 2020, Sandhill Company purchased $3,860,000 of Duggen Company’s 8% bonds, due on July...

On July 1, 2020, Sandhill Company purchased $3,860,000 of Duggen Company’s 8% bonds, due on July 1, 2027. The bonds, which pay interest semiannually on January 1 and July 1, were purchased for $3,340,000 to yield 10%. These bonds are classified as available-for sale and they have a fair value at December 31, 2020, of $3,444,400, prepare the journal entry (if any) at December 31, 2020, to record this transaction.

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ekkarill92 answered 1 year ago

On January 1, 2020, Sandhill Company purchased 8% bonds having a maturity value of $400,000, for...

On January 1, 2020, Sandhill Company purchased 8% bonds having a maturity value of $400,000, for $433,699.52. The bonds provide the bondholders with a 6% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Sandhill 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...

Colah Company purchased $1,500,000 of Jackson, Inc., 8% bonds at par on July 1, 2021, with...

Colah Company purchased $1,500,000 of Jackson, Inc., 8% 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 $1,750,000. Colah sold the Jackson bonds on July 1, 2022 for $1,350,000. Required: 1. Prepare Colah’s journal entries for the following transactions: The purchase of the Jackson bonds on July 1. Interest revenue for the last...

On January 1, 2020, Tamarisk Company purchased $350,000, 8% bonds of Aguirre Co. for $322,973. The...

On January 1, 2020, Tamarisk 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. Tamarisk Company uses the effective-interest method to amortize discount or premium. On January 1, 2022, TamariskCompany sold the bonds for $324,733 after receiving interest to meet its liquidity needs. Prepare the journal entry to record the purchase of bonds on...

On January 1, 2020, Sheffield Company purchased 8% bonds having a maturity value of $240,000, for...

On January 1, 2020, Sheffield Company purchased 8% bonds having a maturity value of $240,000, for $260,219.71. The bonds provide the bondholders with a 6% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Sheffield Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.

On January 1, 2020, Sarasota Company purchased $432,000 worth of 8% bonds of Aguirre Co. for...

On January 1, 2020, Sarasota Company purchased $432,000 worth of 8% bonds of Aguirre Co. for $398,642. The bonds were purchased to yield 10% interest. Interest is payable semi-annually, on July 1 and January 1. The bonds mature on January 1, 2025. Sarasota Company uses the effective interest method to amortize the discount or premium. On January 1, 2022, to meet its liquidity needs, Sarasota Company sold the bonds for $400,384, after receiving interest. Prepare the journal entry to record...

On January 1, 2020, Ayayai Company purchased 8% bonds having a maturity value of $360,000, for...

On January 1, 2020, Ayayai Company purchased 8% bonds having a maturity value of $360,000, for $390,329.57. The bonds provide the bondholders with a 6% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Ayayai 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, Sarasota Company purchased 8% bonds having a maturity value of $280,000, for...

On January 1, 2020, Sarasota Company purchased 8% bonds having a maturity value of $280,000, for $303,589.66. The bonds provide the bondholders with a 6% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Sarasota 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...

Colah Company purchased $1.8 million of Jackson, Inc., 8% bonds at par on July 1, 2018,...

Colah Company purchased $1.8 million of Jackson, Inc., 8% bonds at par on July 1, 2018, with interest paid semi-annually. Colah determined that it should account for the bonds as an available-for-sale investment. At December 31, 2018, the Jackson bonds had a fair value of $2.08 million. Colah sold the Jackson bonds on July 1, 2019 for $1,620,000. The purchase of the Jackson bonds on July 1. Interest revenue for the last half of 2018. Any year-end 2018 adjusting entries....

Colah Company purchased $1.5 million of Jackson, Inc. 8% bonds at par on July 1, 2018,...

Colah Company purchased $1.5 million of Jackson, Inc. 8% bonds at par on July 1, 2018, with interest paid semi-annually. When the bonds were acquired Colah decided to elect the fair value option for accounting for its investment. At December 31, 2018, the Jackson bonds had a fair value of $1.75 million. Colah sold the Jackson bonds on July 1, 2019 for $1,350,000. Required: 1. Prepare Colah's journal entries for the following transactions: a. The purchase of the Jackson bonds...

On July 1, 2018, Kit Kat Company purchased $400,000 of Kool Company’s 10%, 10-year bonds for...

On July 1, 2018, Kit Kat Company purchased $400,000 of Kool Company’s 10%, 10-year bonds for $354,118, reflecting a 12% market rate. Interest on the bonds is paid semi-annually on December 31 and June 30. Requirement 1: On July 1, 2018, what entry did Kit Kat record for the purchase of the bonds? Below the entry, show the effect of the transaction on the 2018 financial statements. ASSETS = LIABILITIES + SHAREHOLDERS’ EQUITY 2018 NET INCOME Requirement 2: On December...

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