Homework Help is Here – Start Your Trial Now!
Business
Accounting
On 1 January 20X2, Speedy Company purchased $4,700,000 of Wind Corp. 3% bonds, classified as an FVOCI-Bond investment for $4,288,653. The bonds pay semi-annual interest each 30 June and 31 December. The market interest rate was 5% on the date of purchase. The bonds mature on 31 December 20X6. At the end of 20X2, the bonds had a fair value of $4,600,000. On 1 July 20X3, Speedy sold the bonds for $4,660,000. Required: 1. Construct a table that shows interest revenue reported by Speedy for the first three interest periods. Use the effective-interest method. Bond Period Cash Payment 2.5% Interest Discount Revenue Amortization Carrying Value 0 1 2 3 + 2. Prepare the entries for the first year assuming that the investment is classified as FVOCI-Bond. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list 1 Record the Interest received on June 30. 2 Record the Interest on December 31. 3 Record the adjust to fair value at December 31, 20X2. ☑ ebit Credit

On 1 January 20X2, Speedy Company purchased $4,700,000 of Wind Corp. 3% bonds, classified as an FVOCI-Bond investment for $4,288,653. The bonds pay semi-annual interest each 30 June and 31 December. The market interest rate was 5% on the date of purchase. The bonds mature on 31 December 20X6. At the end of 20X2, the bonds had a fair value of $4,600,000. On 1 July 20X3, Speedy sold the bonds for $4,660,000. Required: 1. Construct a table that shows interest revenue reported by Speedy for the first three interest periods. Use the effective-interest method. Bond Period Cash Payment 2.5% Interest Discount Revenue Amortization Carrying Value 0 1 2 3 + 2. Prepare the entries for the first year assuming that the investment is classified as FVOCI-Bond. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list 1 Record the Interest received on June 30. 2 Record the Interest on December 31. 3 Record the adjust to fair value at December 31, 20X2. ☑ ebit Credit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

ksk.6

On 1 January 20X2, Speedy Company purchased $4,700,000 of Wind Corp. 3% bonds, classified as an FVOCI-Bond investment for $4,288,653. The bonds pay semi-annual interest each 30 June and 31 December. The market interest rate was 5% on the date of purchase. The bonds mature on 31 December 20X6. At the end of 20X2, the bonds had a fair value of $4,600,000. On 1 July 20X3, Speedy sold the bonds for $4,660,000. Required: 1. Construct a table that shows interest revenue reported by Speedy for the first three interest periods. Use the effective-interest method. Bond Period Cash Payment 2.5% Interest Discount Revenue Amortization Carrying Value 0 1 2 3 + 2. Prepare the entries for the first year assuming that the investment is classified as FVOCI-Bond. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list 1 Record the Interest received on June 30. 2 Record the Interest on December 31. 3 Record the adjust to fair value at December 31, 20X2. ☑ ebit Credit
Transcribed Image Text:On 1 January 20X2, Speedy Company purchased $4,700,000 of Wind Corp. 3% bonds, classified as an FVOCI-Bond investment for $4,288,653. The bonds pay semi-annual interest each 30 June and 31 December. The market interest rate was 5% on the date of purchase. The bonds mature on 31 December 20X6. At the end of 20X2, the bonds had a fair value of $4,600,000. On 1 July 20X3, Speedy sold the bonds for $4,660,000. Required: 1. Construct a table that shows interest revenue reported by Speedy for the first three interest periods. Use the effective-interest method. Bond Period Cash Payment 2.5% Interest Discount Revenue Amortization Carrying Value 0 1 2 3 + 2. Prepare the entries for the first year assuming that the investment is classified as FVOCI-Bond. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list 1 Record the Interest received on June 30. 2 Record the Interest on December 31. 3 Record the adjust to fair value at December 31, 20X2. ☑ ebit Credit
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
steps

Unlock instant AI solutions

Tap the button
to generate a solution

SEE SOLUTION
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS