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Date Account Titles and Explanation Debit Credit Dec. 31 Dec. 31 (To record collection of interest) (To record fair value adjustment)

Date Account Titles and Explanation Debit Credit Dec. 31 Dec. 31 (To record collection of interest) (To record fair value adjustment)

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter2: Analyzing Transactions: The Accounting Equation
Section: Chapter Questions
Problem 2TF: Accounts Payable is an example of an asset account.
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On January 1, 2022, Sarasota and Lois Company purchased 12% bonds having a maturity value of $324,000 for $348,564.30. The
bonds provide the bondholders with a 10% yield. They are dated January 1, 2022, and mature on January 1, 2027, with interest
receivable on December 31 of each year. Sarasota and Lois Company uses the effective interest method to allocate unamortized
discount or premium. The bonds are carried at FV-OCI. The fair value of the bonds at December 31 of each year-end is as follows:
2022
$346,000
2023
$334,000

 

 

 

Date Account Titles and Explanation Debit Credit Dec. 31 Dec. 31 (To record collection of interest) (To record fair value adjustment)
Transcribed Image Text:Date Account Titles and Explanation Debit Credit Dec. 31 Dec. 31 (To record collection of interest) (To record fair value adjustment)
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