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Long-term investments and the time value of money On January 1, 2019, JP Chemical Company purchases...

Long-term investments and the time value of money

On January 1, 2019, JP Chemical Company purchases $10,000 of 6% bonds in American Airline at a price of 95. JP Chemical Company intends to hold the bonds until the maturity date on January 1, 2029. The interest dates are January 1 and July 1. JP Chemical Company amortizes any discount or premium using the straight-line method. The fiscal year end of JP Chemical Company is December 31.
 
Required:
 
Prepare the journal entries on:
1. January 1, 2019
2. July 1, 2019
3. December 31, 2019
4. January 1, 2020
 
Explanations are required.

Solutions

Expert Solution

Hi

Let me know in case you face any issue related to format or other. Base of calculation has been mentioned within entries. Naming convention of Account titles can be slightly different per question format:

ekkarill92 answered 1 year ago
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