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
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 1MC
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Question
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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