21) On January 1, 2022, Grouper and Lois Company purchased 12% bonds having a maturity value of $270,000 for $290,470.25. Thebonds provide the bondholders with a 10% yield. They are dated January 1, 2022, and mature on January 1, 2027, with interestreceivable on December 31 of each year. Grouper and Lois Company uses the effective interest method to allocate unamortizeddiscount or premium. The bonds are carried at FV-OCI. The fair value of the bonds at December 31 of each year-end is as follows:2022 $288.500$278.0002023(a)Prepare the journal entries to record the interest received and recognition of fair value for 2022. (Credit account titles areautomatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titlesand enter O for the amounts. List all debit entries before credit entries. Round answers to 2 decimal places, e.g. 52.75.) (b)Prepare the journal entries to record the recognition of fair value for 2023 and assuming the investment is sold for $278,000 onDecember 31, 2023, reclassifying any accumulated holding gains or losses to net income. (Credit account titles are automaticallyindented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O forthe amounts. List all debit entries before credit entries. Round answers to 2 decimal places, e.g. 52.75.)Date Account Titles and ExplanationDec. 31Dec. 31(To adjust to fair value at date of disposal)DebitCredit

A journal entry records a business transaction in the accounting system for an organization. Journal…

On January 1, 2022, Grouper and Lois Company purchased 12% bonds having a maturity value of $270,000 for $290,470.25. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2022, and mature on January 1, 2027, with interest receivable on December 31 of each year. Grouper and Lois Company uses the effective interest method to allocate unamortized discount or premium. The bonds are carried at FV-OCI. The fair value of the bonds at December 31 of each year-end is as follows: 2022 $288.500 2023 $278.000

On January 1, 2022, Grouper and Lois Company purchased 12% bonds having a maturity value of $270,000 for $290,470.25. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2022, and mature on January 1, 2027, with interest receivable on December 31 of each year. Grouper and Lois Company uses the effective interest method to allocate unamortized discount or premium. The bonds are carried at FV-OCI. The fair value of the bonds at December 31 of each year-end is as follows: 2022 $288.500 2023 $278.000

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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