N1.Account MCK Inc. purchased on January 1, 2021, $600.000. 6% bonds of Aguirre Co. for$536,621. The bonds were purchased to yield 8% interest. Interest is payablesemiannually on June 30 and December 31. The bonds mature on December 31,2027. MCK Inc. uses the effective-interest method to amortize discounts or premiums.MCK considers these Available-for-sale securities, and at 12/31/2021 the fair value ofthe bonds is $541,000. As of this date there was no balance in the Fair ValueAdjustment account. An amortization table for the 2021 interest payments is providedbelow.6/30/21CashInterestReceived Revenue18,000.00 21,464.84 3,464.8412/31/21 18,000.00 21,603.43Amortization21,603.43 3,603.43Provide the journal entry for 01/01/2021CarryingValue536,621540,086543,689

When the issue price of a bond is lower than the face value then, it is called to be issued…

MCK Inc. purchased on January 1, 2021, $600.000. 6% bonds of Aguirre Co. for $536,621. The bonds were purchased to yield 8% interest. Interest is payable semiannually on June 30 and December 31. The bonds mature on December 31 2027. MCK Inc. uses the effective-interest method to amortize discounts or prem MCK considers these Available-for-sale securities, and at 12/31/2021 the fair val the bonds is $541,000. As of this date there was no balance in the Fair Value Adjustment account. An amortization table for the 2021 interest payments is prov below. 6/30/21 Cash Received Interest Revenue 18,000.00 21,464.84 3,464.84 12/31/21 18,000.00 21,603.43 Amortization 21,603.43 3,603.43 Provide the journal entry for 01/01/2021 Carrying Value 536,621 540,086 543,689

MCK Inc. purchased on January 1, 2021, $600.000. 6% bonds of Aguirre Co. for $536,621. The bonds were purchased to yield 8% interest. Interest is payable semiannually on June 30 and December 31. The bonds mature on December 31 2027. MCK Inc. uses the effective-interest method to amortize discounts or prem MCK considers these Available-for-sale securities, and at 12/31/2021 the fair val the bonds is $541,000. As of this date there was no balance in the Fair Value Adjustment account. An amortization table for the 2021 interest payments is prov below. 6/30/21 Cash Received Interest Revenue 18,000.00 21,464.84 3,464.84 12/31/21 18,000.00 21,603.43 Amortization 21,603.43 3,603.43 Provide the journal entry for 01/01/2021 Carrying Value 536,621 540,086 543,689

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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