General Corporation purchased $938,000 of bonds with a coupon rate of 10% at face value on December 5, 2021. The market price of the bond was $984,000 on December 31, 2021. Required: Prepare the appropriate journal entry on December 31, 2021, to properly value the bonds assuming the bonds are classified as: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Ignore the journal entry for coupon payment and interest recognition. 1. Trading securities. 2. Securities available-for-sale. 3. Held-to-maturity securities.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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General Corporation purchased $938,000 of bonds with a coupon rate of 10% at face value on December 5, 2021. The market price of
the bond was $984,000 on December 31, 2021.
Required:
Prepare the appropriate journal entry on December 31, 2021, to properly value the bonds assuming the bonds are classified as: (If no
entry is required for a transaction/event, select "No journal entry required" in the first account field.) Ignore the journal entry for
coupon payment and interest recognition.
1. Trading securities.
2. Securities available-for-sale.
3. Held-to-maturity securities.
View transaction list
Journal entry worksheet
1
2
3
>
Record the unrealized holding gain or loss for securities available-for-sale.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit
2
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13 of 16
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Transcribed Image Text:General Corporation purchased $938,000 of bonds with a coupon rate of 10% at face value on December 5, 2021. The market price of the bond was $984,000 on December 31, 2021. Required: Prepare the appropriate journal entry on December 31, 2021, to properly value the bonds assuming the bonds are classified as: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Ignore the journal entry for coupon payment and interest recognition. 1. Trading securities. 2. Securities available-for-sale. 3. Held-to-maturity securities. View transaction list Journal entry worksheet 1 2 3 > Record the unrealized holding gain or loss for securities available-for-sale. Note: Enter debits before credits. Transaction General Journal Debit Credit 2 < Prev 13 of 16 Next >
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