On January 1, 2020, Ayayai Company acquires $300,000 of Spiderman Products, Inc., 9% bonds at a price of $271,666. Interest isreceived on January 1 of each year, and the bonds mature on January 1, 2023. The investment will provide Ayayai Company a 13%yield. The bonds are classified as held-to-maturity.Show Transcribed Text(c)Prepare the journal entry for the interest revenue and discount amortization under the straight-line method atDecember 31, 2021.(d)Prepare the journal entry for the interest revenue and discount amortization under the effective-interest method atDecember 31, 2021.(Round answers to O decimal places, eg. 2,500. Credit account titles are automatically indented when amount is entered. Do not indentmanually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)No. Account Titles and Explanation(c)(d)Interest RevenueInterest RevenueDebit27,00027,000Credit

BondsThe financial or legal instrument that represents a loan taken by a person is called a bond.…

On January 1, 2020, Ayayai Company acquires $300,000 of Spiderman Products, Inc., 9% bonds at a price of $271,666. Interest is received on January 1 of each year, and the bonds mature on January 1, 2023. The investment will provide Ayayai Company a 13% yield. The bonds are classified as held-to-maturity. Show Transcribed Text (c) (d) Prepare the journal entry for the interest revenue and discount amortization under the straight-line method at December 31, 2021. Prepare the journal entry for the interest revenue and discount amortization under the effective-interest method at December 31, 2021. (Round answers to 0 decimal places, eg. 2,500. 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.) No. Account Titles and Explanation (c) (d) Interest Revenue Interest Revenue Debit 27,000 27,000 Credit

On January 1, 2020, Ayayai Company acquires $300,000 of Spiderman Products, Inc., 9% bonds at a price of $271,666. Interest is received on January 1 of each year, and the bonds mature on January 1, 2023. The investment will provide Ayayai Company a 13% yield. The bonds are classified as held-to-maturity. Show Transcribed Text (c) (d) Prepare the journal entry for the interest revenue and discount amortization under the straight-line method at December 31, 2021. Prepare the journal entry for the interest revenue and discount amortization under the effective-interest method at December 31, 2021. (Round answers to 0 decimal places, eg. 2,500. 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.) No. Account Titles and Explanation (c) (d) Interest Revenue Interest Revenue Debit 27,000 27,000 Credit

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 August 1, 2021, Crane Company acquired 1310, $1000, 9% bonds at 97 plus accrued interest. The bonds were dated May 1, 2018, and mature on April 30, 2027, with interest paid each October 31 and April 30. The bonds will be added to Crane’s available-for-sale portfolio. The preferred entry to record the purchase of the bonds on August 1, 2021 isa. Debt Investments 1310000 Interest Revenue 29475 Discount on Debt Investments 39300 Cash 1300175 b. Debt Investments 1300175 Cash 1300175 c. Debt Investments 1270700 Interest Receivable 29475 Cash 1300175 d. Debt Investments 1270700 Interest Revenue 29475 Cash 1300175
Give me correct answer and explanation.m
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On January 1, 2021, Flour D Company acquired for P1,200,000 the entireP1,000,000 12% bond issue of another entity to be held as financial asset at amortized cost.Bonds of P200,000 mature at annual interval beginning December 31, 2021.Interest is payable semiannually on June 30 and December31. Requirement a.What is the carrying value of Bonds in December 31, 2021? b.What is the interest Income to be reported in December 31, 2021? c.What is the carrying value of Bonds in December 31, 2022?
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