Colah Company purchased $1,000,000 of Jackson, Inc., 5% bonds at their face amount on July 1, 2021, with interest paid semi- annually. The bonds mature in 20 years but Colah planned to keep them for less than 3 years, and classified them as available for sale Investments. When the bonds were acquired Colah decided to elect the fair value option for accounting for its Investment. At December 31, 2021, the Jackson bonds had a fair value of $1,200,000. Colah sold the Jackson bonds on July 1, 2022 for $900,000. a. The purchase of the Jackson bonds on July 1. b. Interest revenue for the last half of 2021. c. Any year-end 2021 adjusting entries. d. Interest revenue for the first half of 2022. e. Any entry or entries necessary upon sale of the Jackson bonds on July 1, 2022. Required: 1. Prepare Colah's journal entries for above 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare Colah's journal entries for above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list
Colah Company purchased $1,000,000 of Jackson, Inc., 5% bonds at their face amount on July 1, 2021, with interest paid semi- annually. The bonds mature in 20 years but Colah planned to keep them for less than 3 years, and classified them as available for sale Investments. When the bonds were acquired Colah decided to elect the fair value option for accounting for its Investment. At December 31, 2021, the Jackson bonds had a fair value of $1,200,000. Colah sold the Jackson bonds on July 1, 2022 for $900,000. a. The purchase of the Jackson bonds on July 1. b. Interest revenue for the last half of 2021. c. Any year-end 2021 adjusting entries. d. Interest revenue for the first half of 2022. e. Any entry or entries necessary upon sale of the Jackson bonds on July 1, 2022. Required: 1. Prepare Colah's journal entries for above 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare Colah's journal entries for above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Colah Company purchased $1,000,000 of Jackson, Inc., 5% bonds at their face amount on July 1, 2021, with interest paid semi-
annually. The bonds mature in 20 years but Colah planned to keep them for less than 3 years, and classified them as available for sale
Investments. When the bonds were acquired Colah decided to elect the fair value option for accounting for its Investment. At
December 31, 2021, the Jackson bonds had a fair value of $1,200,000. Colah sold the Jackson bonds on July 1, 2022 for $900,000.
a. The purchase of the Jackson bonds on July 1.
b. Interest revenue for the last half of 2021.
c. Any year-end 2021 adjusting entries.
d. Interest revenue for the first half of 2022.
e. Any entry or entries necessary upon sale of the Jackson bonds on July 1, 2022.
Required:
1. Prepare Colah's journal entries for above 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.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Prepare Colah's journal entries for above transactions. (If no entry is required for a transaction/event, select "No journal entry required"
in the first account field. Enter your answers in whole dollars.)
View transaction list
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