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Bridgeport Limited has two debt securities classified as FV-OCI. For the Chan bonds, assume the amortization table noted below. Assume further that the Anacomp bonds were purchased at par value (therefore there is no premium or discount) and that no impairment exists. Bonds Purchased to Yield 11% Interest Bond Discount Amortization Income Cash Date Received 1/1/23 7/1/23 $3,280 $4,000 1/1/24 3,280 4,040 $720 760 Amortized Cost of Bonds $72,728 73,448 74,208

Bridgeport Limited has two debt securities classified as FV-OCI. For the Chan bonds, assume the amortization table noted below. Assume further that the Anacomp bonds were purchased at par value (therefore there is no premium or discount) and that no impairment exists. Bonds Purchased to Yield 11% Interest Bond Discount Amortization Income Cash Date Received 1/1/23 7/1/23 $3,280 $4,000 1/1/24 3,280 4,040 $720 760 Amortized Cost of Bonds $72,728 73,448 74,208

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Prepare the journal entry to record the sale
1/1/28 Total Bridgeport Limited has two debt securities classified as FV-OCI. For the Chan bonds, assume the amortization table noted below. Assume further that the Anacomp bonds were purchased at par value (therefore there is no premium or discount) and that no impairment exists. Date 1/1/23 7/1/23 1/1/24 7/1/24 1/1/25 7/1/25 1/1/26 7/1/26 1/1/27 7/1/27 1/1/28 3,280 Bonds Purchased to Yield 11% Cash Interest Bond Discount Received Income Amortization $3,280 $4,000 3,280 3,280 3,280 3,280 3,280 3,280 3,280 3,280 3,280 4,448 $32,800 $42,072 4,040 4,081 4,125 4,172 4,221 4,273 4,327 4,385 4,448 1,168 Investments in Bonds Chan Corporation 8% bonds Anacomp Corporation 10% bonds Total portfolio Previous fair value adjustment balance Fair value adjustment-Cr. $9,272 $720 760 801 845 892 941 993 1,047 1.105 1,168 FV-OCI Investment Portfolio December 31, 2023 Amortized Cost of Bonds $72,728 73,448 74,208 75,009 75,854 76,746 77,687 78,680 79,727 80,832 Amortized Cost $74,208 216,000 $290,208 $280,200 82.000 82,000 Fair Value Unrealized Gain (Loss) $84,200 $9,992 196,000 (20,000) (10,008) -0- $(10,008) Assume that Bridgeport sold the Chan bonds on July 1, 2024, for $70,000, at which time they had an amortized cost of $75,009 (after adjusting for discount amortization of $801). Assume further that the fair value of the Anacomp bonds at December 31, 2024, is $211,000. There was no other activity in the investment portfolio between July 1 and December 31, 2024.
Transcribed Image Text:1/1/28 Total Bridgeport Limited has two debt securities classified as FV-OCI. For the Chan bonds, assume the amortization table noted below. Assume further that the Anacomp bonds were purchased at par value (therefore there is no premium or discount) and that no impairment exists. Date 1/1/23 7/1/23 1/1/24 7/1/24 1/1/25 7/1/25 1/1/26 7/1/26 1/1/27 7/1/27 1/1/28 3,280 Bonds Purchased to Yield 11% Cash Interest Bond Discount Received Income Amortization $3,280 $4,000 3,280 3,280 3,280 3,280 3,280 3,280 3,280 3,280 3,280 4,448 $32,800 $42,072 4,040 4,081 4,125 4,172 4,221 4,273 4,327 4,385 4,448 1,168 Investments in Bonds Chan Corporation 8% bonds Anacomp Corporation 10% bonds Total portfolio Previous fair value adjustment balance Fair value adjustment-Cr. $9,272 $720 760 801 845 892 941 993 1,047 1.105 1,168 FV-OCI Investment Portfolio December 31, 2023 Amortized Cost of Bonds $72,728 73,448 74,208 75,009 75,854 76,746 77,687 78,680 79,727 80,832 Amortized Cost $74,208 216,000 $290,208 $280,200 82.000 82,000 Fair Value Unrealized Gain (Loss) $84,200 $9,992 196,000 (20,000) (10,008) -0- $(10,008) Assume that Bridgeport sold the Chan bonds on July 1, 2024, for $70,000, at which time they had an amortized cost of $75,009 (after adjusting for discount amortization of $801). Assume further that the fair value of the Anacomp bonds at December 31, 2024, is $211,000. There was no other activity in the investment portfolio between July 1 and December 31, 2024.
Prepare the journal entry to record the sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date Account Titles and Explanation July 1/24 July 1/24 July 1/24 (To revalue the investment to fair value) (To recognize the sale) (To reclassify the accumulated unrealized gain or loss) Debit Credit
Transcribed Image Text:Prepare the journal entry to record the sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date Account Titles and Explanation July 1/24 July 1/24 July 1/24 (To revalue the investment to fair value) (To recognize the sale) (To reclassify the accumulated unrealized gain or loss) Debit Credit
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