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On January 1, 2018, West Company purchased $600,000 of 6%, 5-year bonds, as an available-for-sale security, with interest payable on July 1 and January 1. The bonds sell for $623,625, which results in a premium of $23,625 and an effective interest of 4%. Instructions Complete the Interest Revenue Received and Bond Amortization Schedule. Date Cash Received Interest Revenue Bond Premium Amortization Carrying Amount Of Bonds 1/1/18       $623,625 7/1/18         1/1/19         7/1/19         1/1/20         7/1/20         1/1/21         7/1/21         1/1/22         7/1/22         1/1/23         7/1/23

On January 1, 2018, West Company purchased $600,000 of 6%, 5-year bonds, as an available-for-sale security, with interest payable on July 1 and January 1. The bonds sell for $623,625, which results in a premium of $23,625 and an effective interest of 4%. Instructions Complete the Interest Revenue Received and Bond Amortization Schedule. Date Cash Received Interest Revenue Bond Premium Amortization Carrying Amount Of Bonds 1/1/18       $623,625 7/1/18         1/1/19         7/1/19         1/1/20         7/1/20         1/1/21         7/1/21         1/1/22         7/1/22         1/1/23         7/1/23

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 January 1, 2018, West Company purchased $600,000 of 6%, 5-year bonds, as an available-for-sale security, with interest payable on July 1 and January 1. The bonds sell for $623,625, which results in a premium of $23,625 and an effective interest of 4%.

Instructions

Complete the Interest Revenue Received and Bond Amortization Schedule.

Date Cash Received Interest Revenue Bond Premium Amortization Carrying Amount Of Bonds
1/1/18       $623,625
7/1/18        

1/1/19

        
7/1/19        
1/1/20        
7/1/20        
1/1/21        
7/1/21        
1/1/22        
7/1/22        
1/1/23        
7/1/23        

 

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