Cullumber Company purchased, on January 1, 2025, as an available-for-sale security, $78,000 of the 11%, 5-year bonds of Uli Corporation for $72,513, which provides an 13% return. Prepare Cullumber's journal entries for (a) the purchase of the investment, (b) the receipt of annual interest and discount amortization, and (c) the year-end fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) The bonds have a year-end fair value of $74,100. Assume effective-interest amortization is used. (List all debit entries before credit entries. Credit account titles are automatically indented when 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. Round answers to O decimal places, e.g. 1,225.) No. Date (a) January 1, 2025 Account Titles and Explanation cash (b) December 31, 2025 Cash Debt Investments Interest Revenue (c) December 31, 2025 Fair Value Adjustment Unrealized Holding Gain or Loss - Equity Debit

Cullumber Company purchased, on January 1, 2025, as an available-for-sale security, $78,000 of the 11%, 5-year bonds of Uli Corporation for $72,513, which provides an 13% return. Prepare Cullumber's journal entries for (a) the purchase of the investment, (b) the receipt of annual interest and discount amortization, and (c) the year-end fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) The bonds have a year-end fair value of $74,100. Assume effective-interest amortization is used. (List all debit entries before credit entries. Credit account titles are automatically indented when 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. Round answers to O decimal places, e.g. 1,225.) No. Date (a) January 1, 2025 Account Titles and Explanation cash (b) December 31, 2025 Cash Debt Investments Interest Revenue (c) December 31, 2025 Fair Value Adjustment Unrealized Holding Gain or Loss - Equity Debit

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 7RE: Refer to the information in RE13-5. Assume that on December 31, 2019, the investment in Smith...

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