Sheridan Corporation purchased on January 1, 2020, as a held-to-maturity investment, $52,000 of the 7%, 5-year bonds of Harrison, Inc. for $56,551, which providesa 5% return. The bonds pay interest semiannually.Prepare Sheridan's journal entries for (a) the purchase of the investment, and (b) the receipt of semiannual interest and premium amortization. Assume effective-interest amortization is used. (Round answers to 0 decimal places, e.g. 5,125. 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 0 for the amounts.)No. Account Titles and Explanation(a)(b)DebitCredit

heridan Corporation purchased on January 1, 2020, as a held-to-maturity investment, $52,000 of the 7%, 5-year bonds of Harrison, Inc. for $56,551, which provides 5% return. The bonds pay interest semiannually. epare Sheridan's journal entries for (a) the purchase of the investment, and (b) the receipt of semiannual interest and premium amortization. Assume effective- terest amortization is used. (Round answers to 0 decimal places, e.g. 5,125. Credit account titles are automatically indented when amount is entered. o not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Credit o. Account Titles and Explanation a) b) Debit

heridan Corporation purchased on January 1, 2020, as a held-to-maturity investment, $52,000 of the 7%, 5-year bonds of Harrison, Inc. for $56,551, which provides 5% return. The bonds pay interest semiannually. epare Sheridan's journal entries for (a) the purchase of the investment, and (b) the receipt of semiannual interest and premium amortization. Assume effective- terest amortization is used. (Round answers to 0 decimal places, e.g. 5,125. Credit account titles are automatically indented when amount is entered. o not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Credit o. Account Titles and Explanation a) b) Debit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On July 1, 2020, West Company purchased for cash, ten $10,000 bonds of North Corporation at a market rate of 6%. The bonds pay 5% interest, payable on a semiannual basis each July 1 and January 1, and mature on July 1, 2023. The bonds are classified as trading securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discounts or premiums. Ignore income taxes. d. Record the receipt of interest on January 1, 2021. e. Record the sale of all of the bonds on January 2, 2021, for $99,600. f. Record the adjustment to the Fair Value Adjustment account on December 31, 2021, assuming no additional TS investments. Note: List multiple debits or credits (when applicable) in alphabetical order. Note: Round each amount to the nearest whole dollar.
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On January 1, 2019, Rodgers Company purchased $200,000 face value, 10%, 3-year bonds for $190,165.35, a price that yields a 12% effective annual interest rate. The bonds pay interest semiannually on June 30 and December 31. Required: 1. Record the purchase of the bonds. 2. Prepare an investment interest income and discount amortization schedule using the effective interest method. 3. Record the receipts of interest on June 30, 2019, and June 30, 2021.
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On January 1, 2020, Metlock Company acquires $ 110,000 of Spiderman Products, Inc., 9% bonds at a price of $ 99,611. Interest is received on January 1 of each year, and the bonds mature on January 1, 2023. The investment will provide Metlock Company a 13% yield. The bonds are classified as held-to-maturity. Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the effective-interest method. (Round answers to 0 decimal places, e.g. 2,500.) Schedule of Interest Revenue and Bond Discount AmortizationEffective-Interest MethodBond Purchased to Yield Date CashReceived InterestRevenue Bond DiscountAmortization Carrying Amountof Bonds 1/1/20 $ enter a dollar amount $ enter a dollar amount $ enter a dollar amount $ enter a dollar amount 1/1/21 enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount 1/1/22 enter a dollar amount…
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On October 1, 2021, Complex Company purchased a 12% P3,000,000 face amount bond issue for P2,700,000 excluding accrued interest to be held as financial osset at amortized cost. The date of the bonds is February 1, 2021 and the interest is payable semiannually on February 1 and August 1. The bonds mature annually at the rate of P1,000,000 on February 1; 2022 and every February 1 thereafter . what is the amount of amortization on december 31, 2021