in the current year largo company purchased bonds on macdermont corporation with a cost of 125000 and a year end fair value of 127000 these are classified as long term available for sale debt securities prepare the journal entry to record any necessary fair value adjustment to the debt investments of december 31

in the current year largo company purchased bonds on macdermont corporation with a cost of 125000 and a year end fair value of 127000 these are classified as long term available for sale debt securities prepare the journal entry to record any necessary fair value adjustment to the debt investments of december 31

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On June 30, Jamison Company issued $2,500,000 of 10-year, 9% bonds, dated June 30, for $2,580,000. Present entries to record the following transaction. b) Payment of first semiannual interest on December 31 (record separate entry from premium amortization).
Provide Journal entries necessary to record Topsails investment in Charlie companys bonds from January 2 ,20X2 to February 1,20X3.Your entry to record the sale on February 1,20X3 shuld include a reclassification adjustment .Provide Supporting calculations
ntries for Investment in Bonds, Interest, and Sale of Bonds Gonzalez Company acquired $145,800 of Walker Co., 7% bonds on May 1 at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, Gonzalez Company sold $55,800 of the bonds for 97. Journalize entries to record the following in Year 1: For a compound transaction, if an amount box does not require an entry, leave it blank.
On January 1, 2024, X Corporation purchased bonds of R Corporation for $52 million 6 %, 10-year municipal bonds at par and classified the securities as available for sale. Interest revenue is received on June 30 and December 31. On December 31, 2024, these bonds were valued at $46 million. Nine months later, on October 3, 2025, Jefferson Corporation sold these bonds for $62 million. Instructions: Prepared the journal entries for: a. January 1, 2024 b. June 30, 2024, and December 31, 2024, for Interest Revenue c. adjusting the journal entry on December 31, 2024 (if necessary) d. The journal entries on October 3, 2025, when Jefferson Corporation sold these bonds for $62 million.
Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise. Reporting liabilities At December 31, MediStat Precision Instruments owes $52,000 on Accounts Payable, Salaries Payable of $12,000, and Income Tax Payable of $10,000. MediStat also has $300,000 of Bonds Payable that were issued at face value that require payment of a $35,000 installment next year and the remainder in later years. The bonds payable require an annual interest payment of $4,000, and MediStat still owes this interest for the current year. Report MediStat’s liabilities on its classified balance sheet on December 31, 2018.
Vala
An investor company purchased $427,000 of 8% bonds from the investee company on January 1, 2020, with interest payable on December 31. The bonds were classified as Available-for-Sale. The bonds sold for $706,390. Using the effective-interest method, the investor company revised the Available-for-Sale Debt Securities account on December 31, 2020 and December 31, 2021 by the amortized discount/premium of $6,470. and $8,200, respectively. At December 31, 2020, the fair value of the investee company bonds was $912,000. At December 31, 2021, the fair value of the investee company bonds was $843,000. What is the amount of unrealized holding gain/loss related to this investment in 2021? (Very important: Just enter the amount. DO NOT put a plus or minus sign in front of the amount.)
Instructions On January 2, 2020, Mark Company acquired, as a held-to-maturity investment, bonds with a face value of $500,000 for $562,300. The bonds carry a stated interest rate of 12% and an effective yield of 10%. Interest is paid on June 30 and December 31, and the bonds mature on December 31, 2029. Required: Prepare the jourmal entries necessary to record the purchase of the bonds and the first two semi-annual interest receipts using the straight-line method of amortization.
Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise. Reporting liabilities On December 31, MediStat Precision Instruments owes $52,000 on Accounts Payable, Salaries Payable of $12,000, and Income Tax Payable of $10,000. MediStat also has $300,000 of Bonds Payable that was issued at face value that requires payment of a $35,000 installment next year and the remainder in later years. The bonds payable require an annual interest payment of $4,000, and MediStat still owes this interest for the current year. Report MediStat’s liabilities on its classified balance sheet on December 31, 2018.
The following partial amortization schedule is available for Crane Company who sold $1200000, 5-year, 10% bonds on January 1, 2020 for $1248000 and uses annual straight-line amortization. BOND AMORTIZATION SCHEDULE Interest Periods Interestto be paid Interestexpense PremiumAmortization UnamortizedPremium Bond CarryingValue January 1, 2020 $48000 $1248000 January 1, 2021 (i) (ii) (iii) (iv) (v) Which of the following amounts should be shown in cell (v)? $1238400 $1243200 $1252800 $1257600
Recording Entries for HTM Debt Securities— Effective Interest Method On July 1, 2020, West Company purchased for cash, sixteen $10,000 bonds of North Corporation to yield 10%. The bonds pay 9% interest, payable on a semiannual basis each July 1 and January 1, and mature on July 1, 2023. The bonds are classified as held-to-maturity securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discount or premium. e. Record the receipt of interest on January 1, 2021. f. After the interest payment on July 1, 2021, two of the bonds were sold for $38,600 cash. Provide the required entries on July 1, 2021. Note: List multiple debits or credits (when applicable) in alphabetical order. Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero).
Do not give solution in image