In 2021 and 2022, Norman Company had the following transactions related to investments in bonds. 2021 Purchased $400,000 of 8% bonds issued by JS, Inc. at face value. Interest is payable semiannually on September 30 and March 31. Purchased $500,000 of 12% bonds issued by Okla Co. at face value. Interest is payable semiannually on November 30 and May 31. Received semiannual interest payment from JS, Inc. Received semiannual interest payment from Okla Co. Recorded any necessary adjusting entries relating to the investments. Apr. 1 June 1 Sept. 30 Nov. 30 Dec. 31 2022 Mar 31 May 31 Sept. 30 Nov. 30 Dec. 31 Received semiannual interest payment from JS, Inc. Received semiannual interest payment from Okla Co. Received semiannual interest payment from JS, Inc. Received semiannual interest payment from Okla Co. Recorded any necessary adjusting entries relating to the investments. Requirement 1: a. Record the 2021 transactions in journal entries or t-accounts. b. Assume 2021 income from operations was $240,000 (does not include any interest revenue). Compute 2021 net income. c. Show amounts reported on Norman's 2021 balance sheet related to interest on these investments. Requirement 2: a. Record the 2022 transactions in journal entries or t-accounts. b. Assume 2022 income from operations was $180,000 (does not include any interest revenue). Compute 2022 net income. c. Show amounts reported on Norman's 2022 balance sheet related to interest on these investments.
In 2021 and 2022, Norman Company had the following transactions related to investments in bonds. 2021 Purchased $400,000 of 8% bonds issued by JS, Inc. at face value. Interest is payable semiannually on September 30 and March 31. Purchased $500,000 of 12% bonds issued by Okla Co. at face value. Interest is payable semiannually on November 30 and May 31. Received semiannual interest payment from JS, Inc. Received semiannual interest payment from Okla Co. Recorded any necessary adjusting entries relating to the investments. Apr. 1 June 1 Sept. 30 Nov. 30 Dec. 31 2022 Mar 31 May 31 Sept. 30 Nov. 30 Dec. 31 Received semiannual interest payment from JS, Inc. Received semiannual interest payment from Okla Co. Received semiannual interest payment from JS, Inc. Received semiannual interest payment from Okla Co. Recorded any necessary adjusting entries relating to the investments. Requirement 1: a. Record the 2021 transactions in journal entries or t-accounts. b. Assume 2021 income from operations was $240,000 (does not include any interest revenue). Compute 2021 net income. c. Show amounts reported on Norman's 2021 balance sheet related to interest on these investments. Requirement 2: a. Record the 2022 transactions in journal entries or t-accounts. b. Assume 2022 income from operations was $180,000 (does not include any interest revenue). Compute 2022 net income. c. Show amounts reported on Norman's 2022 balance sheet related to interest on these investments.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:АССТ 3113
Supplemental Homework 10
Chapter 12 Accounting for accrued interest on bonds
In 2021 and 2022, Norman Company had the following transactions related to investments in bonds.
2021
Purchased $400,000 of 8% bonds issued by JS, Inc. at face value. Interest is payable
semiannually on September 30 and March 31.
Purchased $500,000 of 12% bonds issued by Okla Co. at face value. Interest is payable semiannually
on November 30 and May 31.
Received semiannual interest payment from JS, Inc.
Received semiannual interest payment from Okla Co.
Recorded any necessary adjusting entries relating to the investments.
Apr. 1
June 1
Sept. 30
Nov. 30
Dec. 31
2022
Received semiannual interest payment from JS, Inc.
Received semiannual interest payment from Okla Co.
Received semiannual interest payment from JS, Inc.
Received semiannual interest payment from Okla Co.
Recorded any necessary adjusting entries relating to the investments.
Mar 31
May 31
Sept. 30
Nov. 30
Dec. 31
Requirement 1:
a. Record the 2021 transactions in journal entries or t-accounts.
b. Assume 2021 income from operations was $240,000 (does not include any interest revenue). Compute 2021
net income.
С.
Show amounts reported on Norman's 2021 balance sheet related to interest on these investments.
Requirement 2:
a. Record the 2022 transactions in journal entries or t-accounts.
b. Assume 2022 income from operations was $180,000 (does not include any interest revenue). Compute 2022
net income.
c. Show amounts reported on Norman's 2022 balance sheet related to interest on these investments.
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