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On April 1, 2025, Splish Brothers Inc. purchased $690,000 of 6% bonds for $717,225 plus accrued interest as an available-for-sale security. Interest is paid on July 1 and January 1 and the bonds mature on July 1, 2030. (a) Your answer is correct. Prepare the journal entry on April 1, 2025. (List all debit entries before credit entries. 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 O for the amounts.) Date Account Titles and Explanation Apr. 1, Debt Investments 2025 Interest Revenue Cash Debit 717,225 10,350 Credit 727,575 (b) The bonds are sold on November 1, 2026 at 103 plus accrued interest. Amortization was recorded when interest was received by the straight-line method. Prepare all entries required to properly record the sale. (List all debit entries before credit entries. 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 O for the amounts. Round answers to O decimal places, e.g. 5,275.) Account Titles and Explanation (To record amortization) (To record interest) Cash (To record the sale of the bonds) Debit Credit

On April 1, 2025, Splish Brothers Inc. purchased $690,000 of 6% bonds for $717,225 plus accrued interest as an available-for-sale security. Interest is paid on July 1 and January 1 and the bonds mature on July 1, 2030. (a) Your answer is correct. Prepare the journal entry on April 1, 2025. (List all debit entries before credit entries. 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 O for the amounts.) Date Account Titles and Explanation Apr. 1, Debt Investments 2025 Interest Revenue Cash Debit 717,225 10,350 Credit 727,575 (b) The bonds are sold on November 1, 2026 at 103 plus accrued interest. Amortization was recorded when interest was received by the straight-line method. Prepare all entries required to properly record the sale. (List all debit entries before credit entries. 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 O for the amounts. Round answers to O decimal places, e.g. 5,275.) Account Titles and Explanation (To record amortization) (To record interest) Cash (To record the sale of the bonds) Debit Credit

FINANCIAL ACCOUNTING
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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On April 1, 2025, Splish Brothers Inc. purchased $690,000 of 6% bonds for $717,225 plus accrued interest as an available-for-sale security. Interest is paid on July 1 and January 1 and the bonds mature on July 1, 2030. (a) Your answer is correct. Prepare the journal entry on April 1, 2025. (List all debit entries before credit entries. 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 O for the amounts.) Date Account Titles and Explanation Apr. 1, Debt Investments 2025 Interest Revenue Cash Debit 717,225 10,350 Credit 727,575
Transcribed Image Text:On April 1, 2025, Splish Brothers Inc. purchased $690,000 of 6% bonds for $717,225 plus accrued interest as an available-for-sale security. Interest is paid on July 1 and January 1 and the bonds mature on July 1, 2030. (a) Your answer is correct. Prepare the journal entry on April 1, 2025. (List all debit entries before credit entries. 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 O for the amounts.) Date Account Titles and Explanation Apr. 1, Debt Investments 2025 Interest Revenue Cash Debit 717,225 10,350 Credit 727,575
(b) The bonds are sold on November 1, 2026 at 103 plus accrued interest. Amortization was recorded when interest was received by the straight-line method. Prepare all entries required to properly record the sale. (List all debit entries before credit entries. 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 O for the amounts. Round answers to O decimal places, e.g. 5,275.) Account Titles and Explanation (To record amortization) (To record interest) Cash (To record the sale of the bonds) Debit Credit
Transcribed Image Text:(b) The bonds are sold on November 1, 2026 at 103 plus accrued interest. Amortization was recorded when interest was received by the straight-line method. Prepare all entries required to properly record the sale. (List all debit entries before credit entries. 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 O for the amounts. Round answers to O decimal places, e.g. 5,275.) Account Titles and Explanation (To record amortization) (To record interest) Cash (To record the sale of the bonds) Debit Credit
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