of each year. Riverbed Company uses the effective-interest method to allocate unamortized discount or premium. T
On January 1, 2020, Riverbed Company purchased 12% bonds, having a maturity value of $ 284,000 for $ 305,531.40. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Riverbed Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair
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2020
|
$ 303,400 |
2023
|
$ 293,200 | |||
|---|---|---|---|---|---|---|
|
2021
|
$ 292,200 |
2024
|
$ 284,000 | |||
|
2022
|
$ 291,200 |
| (a) | Prepare the |
|
|---|---|---|
| (b) | Prepare the journal entries to record the interest revenue and recognition of fair value for 2020. | |
| (c) | Prepare the journal entry to record the recognition of fair value for 2021. |
(Round answers to 2 decimal places, e.g. 2,525.25. 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.)
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No.
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Date
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Account Titles and Explanation
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Debit
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Credit
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|---|---|---|---|---|
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(a)
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choose a transaction date |
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enter an account title to record transaction A
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enter a debit amount
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enter a credit amount
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|---|---|---|---|---|
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enter an account title to record transaction A
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enter a debit amount
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enter a credit amount
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||
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(b)
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choose a transaction date |
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enter an account title to record interest received
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enter a debit amount
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enter a credit amount
|
||
|---|---|---|---|---|
|
enter an account title to record interest received
|
enter a debit amount
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enter a credit amount
|
||
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enter an account title to record interest received
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enter a debit amount
|
enter a credit amount
|
||
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(To record interest received)
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||||
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enter an account title to record fair value adjustment
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enter a debit amount
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enter a credit amount
|
||
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enter an account title to record fair value adjustment
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enter a debit amount
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enter a credit amount
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||
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(To record fair value adjustment)
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||||
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(c)
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choose a transaction date |
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enter an account title to record transaction C
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enter a debit amount
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enter a credit amount
|
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|---|---|---|---|
|
enter an account title to record transaction C
|
enter a debit amount
|
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