Question
In: Accounting
On January 1, 2020, Larkspur Company purchased 12% bonds, having a maturity value of $275,000 for...
On January 1, 2020, Larkspur Company purchased 12% bonds, having
a maturity value of $275,000 for $295,849.07. The bonds provide the
bondholders with a 10% yield. They are dated January 1, 2020, and
mature January 1, 2025, with interest received on January 1 of each
year. Larkspur 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.
|
2020 |
$293,800 |
2023 |
$285,900 | |||
|---|---|---|---|---|---|---|
|
2021 |
$284,800 |
2024 |
$275,000 | |||
|
2022 |
$283,800 |
| (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 2020. | |
| (c) | Prepare the journal entry to record the recognition of fair value for 2021. |
Solutions
ekkarill92 answered 1 year agoRelated Solutions
On January 1, 2017, Culver Company purchased 12% bonds, having a maturity value of $275,000, for...
On January 1, 2017, Culver Company purchased 12% bonds, having a
maturity value of $275,000, for $295,849.07. 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. Culver 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, Marigold Company purchased 12% bonds having a maturity value of $270,000, for...
On January 1, 2020, Marigold Company purchased 12% bonds having
a maturity value of $270,000, for $290,470.00. The bonds provide
the bondholders with a 10% yield. They are dated January 1, 2020,
and mature January 1, 2025, with interest received on January 1 of
each year. Marigold Company uses the effective-interest method to
allocate unamortized discount or premium. The bonds are classified
in the held-to-maturity category.
1.Prepare the journal entry at the date of the bond
purchase.
2.Prepare a bond...
On January 1, 2020, Riverbed Company purchased 12% bonds, having a maturity value of $276,000 for...
On January 1, 2020, Riverbed Company purchased 12% bonds, having
a maturity value of $276,000 for $296,924.88. The bonds provide the
bondholders with a 10% yield. They are dated January 1, 2020, and
mature January 1, 2025, with interest received on January 1 of each
year. Riverbed 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, Indigo Company purchased 12% bonds having a maturity value of $310,000, for...
On January 1, 2020, Indigo Company purchased 12% bonds having a
maturity value of $310,000, for $333,502.59. The bonds provide the
bondholders with a 10% yield. They are dated January 1, 2020, and
mature January 1, 2025, with interest received on January 1 of each
year. Indigo 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, Swifty Company purchased 12% bonds having a maturity value of $230,000, for...
On January 1, 2020, Swifty Company purchased 12% bonds having a
maturity value of $230,000, for $247,437.40. The bonds provide the
bondholders with a 10% yield. They are dated January 1, 2020, and
mature January 1, 2025, with interest received on January 1 of each
year. Swifty 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, Larkspur Inc. sold 14% bonds having a maturity value of $710,000 for...
On January 1, 2020, Larkspur Inc. sold 14% bonds having a
maturity value of $710,000 for $761,190, which provides the
bondholders with a 12% yield. The bonds are dated January 1, 2020,
and mature on January 1, 2025, with interest payable on January 1
of each year. The company follows IFRS and uses the effective
interest method.
Prepare the journal entry at the date of issue.
(Round answers to 0 decimal places, e.g. 5,255. Credit
account titles are automatically indented...
On January 1, 2020, Sarasota Company purchased 10% bonds having a maturity value of $380,000, for...
On January 1, 2020, Sarasota Company purchased 10% bonds having
a maturity value of $380,000, for $410,343.38. The bonds provide
the bondholders with a 8% 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.Prepare a bond amortization...
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, 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...
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.
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Large lots are desirable in supply chain coordination despite increasing holding costs.
- ***Convert the C++ to Python*** #include <iostream> using std::cout; using std::cin; using std::endl; int charClass; char...
- Make-or-Buy Decision Fremont Computer Company has been purchasing carrying cases for its portable computers at a...
- The following costs were incurred for the single product produced during the first year of operations...
- Non-constant growth model: Do=$2.00 required return on equity= 5% g= 9% n=1,2 g=7% n=3,4 g=3% n=5...
- . Find all x ∈ Z143 such that x2Ξ 7 (mod 143). Please explain all steps...
- #Python: A palindrome is a sequence of characters that reads the same backwards as forwards. For...
ADVERTISEMENT