PLEASE HELP WITH MY MISTAKES Current Attempt in ProgressOn January 1, 2025, Whispering Company acquires $300,000 of Spiderman Products, Inc., 9% bonds at a price of $271,666. Interest isreceived on January 1 of each year, and the bonds mature on January 1, 2028. The investment will provide Whispering Companya 13% yield. The bonds are classified as held-to-maturity.(a)Your AnswerCorrect Answer Cash(c)(d)Prepare the journal entry for the interest revenue and discount amortization under the straight-line method atDecember 31, 2026.Prepare the journal entry for the interest revenue and discount amortization under the effective-interest method atDecember 31, 2026.(List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indentmanually. 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.)DateAccount Titles and Explanationr 31, 2026CashInvestment IncomeInterest Revenuer 31, 2026CashInvestment IncomeInterest RevenueeTextbook and MediaDebit270009445270008317Credit36443531

step: 1 c.Prepare the journal entry for the interest revenue under the straight-line…

Answered: Current Attempt in Progress On January…

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 1MC

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Investment Premium Amortization Schedule On January 1, 2019, Lynch Company acquired 13% bonds with a face value of 50,000. The bonds pay interest on June 30 and December 31 and mature on December 31, 2021. Lynch paid 51,229.35, a price that yields a 12% effective annual interest rate. Required: 1. Record the purchase of the bonds. 2. Prepare an investment interest income and premium amortization schedule using the effective interest method. 3. Record the receipts of interest on June 30, 2019, and December 31, 2021.
Held-to-Maturity Securities and Amortization of a Discount On January 1, 2019, Kelly Corporation acquired bonds with a face value of 500,000 for 483,841.79, a price that yields a 10% effective annual interest rate. The bonds carry a 9% stated rate of interest, pay interest semiannually on June 30 and December 31, are due December 31, 2022, and are being held to maturity Required: Prepare journal entries to record the purchase of the bonds and the first two interest receipts using the: 1. straight-line method of amortization 2. effective interest method of amortization
On January 1, 2019, Brewster Company issued 2,000 of its 5-year, 1,000 face value, 11% bonds dated January 1 at an effective annual interest rate (yield) of 9%. Brewster uses the effective interest method of amortization. On December 31, 2023, Brewster extinguished the 2,000 bonds early through acquisition in the open market for 1,980,000. On July 1, 2022, Brewster issued 5,000 of its 6-year, 1,000 face value, 10% convertible bonds dated July 1 at an effective annual interest rate (yield) of 12%. The bonds are convertible at the option of the investor into Brewsters common stock at a ratio of 10 shares of common stock for each bond. Brewster uses the effective interest method of amortization. On July 1, 2023, an investor in Brewsters convertible bonds tendered 1,500 bonds for conversion into 15,000 shares of Brewsters common stock, which had a market value of 105 per share at the date of the conversion. Required: 1. Using the information about Brewster, answer the following questions: a. Were the 11% bonds issued at par, at a discount, or at a premium? Why? b. Is the amount of interest expense for the 11% bonds using the effective interest method of amortization higher in the first or second year of the life of the bond issue? Why? 2. Using the information about Brewster, explain the following: a. How is a gain or loss on early extinguishment of debt determined? Does the early extinguishment of the 11% bonds result in a gain or loss? Why? b. How does Brewster report the early extinguishment of the 11% bonds on the 2023 income statement? 3. Based on the information provided about Brewster, answer the following questions: a. Does recording the conversion of the 10% convertible bonds into common stock under the book value method affect net income? What is the rationale for the book value method? b. Does recording the conversion of the 10% convertible bonds into common stock under the market value method affect net income? What is the rationale for the market value method?
Bats Corporation issued 800,000 of 12% face value bonds for 851,705.70. The bonds were dated and issued on April 1, 2019, are due March 31, 2023, and pay interest semiannually on September 30 and March 31. Bats sold the bonds to yield 10%. Required: 1. Prepare a bond interest expense and premium amortization schedule using the straight-line method. 2. Prepare a bond interest expense and premium amortization schedule using the effective interest method. 3. Prepare any adjusting entries for the end of the fiscal year, December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. Assume the company retires the bonds on June 30, 2020, at 103 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight-line method of amortization b. effective interest method of amortization
Refer to the information in RE13-5. Assume that on June 30, Aggie received interest on the Smith Corporation bonds. Prepare the June 30 journal entries to record the receipt of the interest. On April 30, 2019, Aggie Corporation purchased Smith Corporation 10%, 5-years bonds with a face value of 12,000 at par plus four months of accrued interest. Prepare the April 30 journal entry to record the purchase of these available-for-sale securities.
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Current Attempt in Progress On January 1, 2025, Ivanhoe Company purchased 12% bonds having a maturity value of $312,000 for $335,654.22. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2025, and mature January 1, 2030, with interest received on January 1 of each year. Ivanhoe 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. 2025 $333,600 2028 $322,000 2026 $320,900 2029 $312,000 2027 $320,000 (a) (b) (c) (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 2 decimal places, eg. 1225.25.) Account Titles and Explanation No. Prepare the journal entry at the date of the bond purchase. Prepare…
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Current Attempt in Progress On January 1, 2025, Cheyenne Company purchased 12% bonds having a maturity value of $278,000 for $299,076.51. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2025, and mature January 1, 2030, with interest received on January 1 of each year. Cheyenne 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. 2025 2026 2027 (a) (b) (c) No. $296,600 $287,300 2029 (a) $286,200 2028 (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 2 decimal places, e.g. 1225.25.) $288,200 $278,000 Prepare the journal entry at the date of the bond purchase. Prepare the journal entries to…

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