Exercise 9-3On January 1, 2020, Swifty Limited paid $561,003.30 for 10% bonds with a maturity value of $540,000. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2020, and mature on January 1, 2025, with interest receivable on December 31 of eachyear. Swifty accounts for the bonds using the amortized cost approach, applies ASPE using the effective interest method, and has a December 31 year end.Prepare the journal entry to record the bond purchase. (Credit account titles are automatically indented when the 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.Round answers to 2 decimal places, e.g. 52.75.)DateAccount Titles and ExplanationDebitCreditJan 1, 2020SHOW LIST OF ACCOUNTSLINK TO TEXTLINK TO VIDEOPrepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 52.75.)Schedule of Interest Incomeand Bond Premium AmortizationEffective Interest MethodCarrying Amountof BondsDateCash ReceivedInterest IncomePremium Amortization01/01/2012/31/2012/31/2112/31/2212/31/2312/31/24 Prepare the journal entry to record interest received and interest income for 2020. (Credit account titles are automatically indented when the 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 2 decimal places, e.g.52.75.)DateAccount Titles and ExplanationDebitCreditDec 31, 2020SHOW LIST OF ACCOUNTSLINK TO TEXTLINK TO VIDEOPrepare the journal entry to record interest received and interest income for 2021. (Credit account titles are automatically indented when the 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 2 decimal places, e.g.52.75.)DateAccount Titles and ExplanationDebitCreditDec 31, 2021SHOW LIST OF ACCOUNTSLINK TO VIDEOPrepare the journal entry to record the redemption of the bond at maturity. (Credit account titles are automatically indented when the 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. Round answers to 2 decimal places, e.g. 52.75.)DateAccount Titles and ExplanationDebitCreditJan 1, 2025SHOW LIST OF ACCOUNTSLINK TO TEXTLINK TO VIDEOIf Swifty used the straight-line method of discount/premium amortization, prepare the journal entry to record interest received and interest income the company would make each year. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for theaccount titles and enter 0 for the amounts. Round answers to 2 decimal places, e.g. 52.75.)Account Titles and ExplanationDebitCredit

Journal entries refers to the process of systematic documentation of financial activities of a…

On January 1, 2020, Swifty Limited paid $561,003.30 for 10% bonds with a maturity value of $540,000. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2020, and mature on January 1, 2025, with interest receivable on December 31 of year. Swifty accounts for the bonds using the amortized cost approach, applies ASPE using the effective interest method, and has a December 31 year end. Prepare the journal entry to record the bond purchase. (Credit account titles are automatically indented when the amount Round answers to 2 decimal places, e.g. 52.75.) entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amour Date Account Titles and Explanation Debit Credit Jan 1, 2020 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 52.75.) Schedule of Interest Income and Bond Premium Amortization Effective Interest Method Carrying Amount of Bonds Date Cash Received Interest Income Premium Amortization 01/01/20 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24

On January 1, 2020, Swifty Limited paid $561,003.30 for 10% bonds with a maturity value of $540,000. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2020, and mature on January 1, 2025, with interest receivable on December 31 of year. Swifty accounts for the bonds using the amortized cost approach, applies ASPE using the effective interest method, and has a December 31 year end. Prepare the journal entry to record the bond purchase. (Credit account titles are automatically indented when the amount Round answers to 2 decimal places, e.g. 52.75.) entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amour Date Account Titles and Explanation Debit Credit Jan 1, 2020 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 52.75.) Schedule of Interest Income and Bond Premium Amortization Effective Interest Method Carrying Amount of Bonds Date Cash Received Interest Income Premium Amortization 01/01/20 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24

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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