On January 1, 2020, Nash Company purchased $330,000, 8% bonds of Aguirre Co. for $304,517. The bonds were purchased to yield 10% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2025. Nash Company uses the effective-interest method to amortize discount or premium. On January 1, 2022, Nash Company sold the bonds for $306,162 after receiving interest to meet its liquidity needs. Collapse question part (a) Prepare the journal entry to record the purchase of bonds on January 1. Assume that the bonds are classified as available-for-sale. (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 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 1, 2020 Click if you would like to Show Work for this question: Open Show Work
On January 1, 2020, Nash Company purchased $330,000, 8% bonds of Aguirre Co. for $304,517. The bonds were purchased to yield 10% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2025. Nash Company uses the effective-interest method to amortize discount or premium. On January 1, 2022, Nash Company sold the bonds for $306,162 after receiving interest to meet its liquidity needs. Collapse question part (a) Prepare the journal entry to record the purchase of bonds on January 1. Assume that the bonds are classified as available-for-sale. (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 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 1, 2020 Click if you would like to Show Work for this question: Open Show Work
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2020, Nash Company purchased $330,000, 8% bonds of Aguirre Co. for $304,517. The bonds were purchased to yield 10% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2025. Nash Company uses the effective-interest method to amortize discount or premium. On January 1, 2022, Nash Company sold the bonds for $306,162 after receiving interest to meet its liquidity needs. Collapse question part (a) Prepare the journal entry to record the purchase of bonds on January 1. Assume that the bonds are classified as available-for-sale. (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 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 1, 2020 Click if you would like to Show Work for this question: Open Show Work
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