On January 1, 2022, Pina Colada and Lois Company purchased 12% bonds having a maturity value of $306,000 for $329,199.61. 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. Pina Colada 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 $327,000 2023 $315,000 (a) Prepare the journal entries to record the interest received and recognition of fair value for 2022. (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. List all debit entries before credit entries. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation Dec. 31 Dec. 31 (b). eTextbook and Media (To record collection of interest) eTextbook (To record fair value adjustment) List of Accounts Save for Later Last saved 1 second ago. Saved work will be auto-submitted on the due date. Auto- submission can take up to 10 minutes. Dec. 31 Date Account Titles and Explanation Dec. 31 Dec. 31 Prepare the journal entries to record the recognition of fair value for 2023 and assuming the investment is sold for $315,000 on December 31, 2023, reclassifying any accumulated holding gains or losses to net income. (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. List all debit entries before credit entries. Round answers to 2 decimal places, e.g. 52.75.) (To adjust to fair value at date of disposal) (To record disposal) Debit (To reclassify holding loss) Credit Debit Assistance Used Attempts: 0 of 2 used Submit Answer Credit
On January 1, 2022, Pina Colada and Lois Company purchased 12% bonds having a maturity value of $306,000 for $329,199.61. 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. Pina Colada 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 $327,000 2023 $315,000 (a) Prepare the journal entries to record the interest received and recognition of fair value for 2022. (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. List all debit entries before credit entries. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation Dec. 31 Dec. 31 (b). eTextbook and Media (To record collection of interest) eTextbook (To record fair value adjustment) List of Accounts Save for Later Last saved 1 second ago. Saved work will be auto-submitted on the due date. Auto- submission can take up to 10 minutes. Dec. 31 Date Account Titles and Explanation Dec. 31 Dec. 31 Prepare the journal entries to record the recognition of fair value for 2023 and assuming the investment is sold for $315,000 on December 31, 2023, reclassifying any accumulated holding gains or losses to net income. (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. List all debit entries before credit entries. Round answers to 2 decimal places, e.g. 52.75.) (To adjust to fair value at date of disposal) (To record disposal) Debit (To reclassify holding loss) Credit Debit Assistance Used Attempts: 0 of 2 used Submit Answer Credit
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
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 16E
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Transcribed Image Text:On January 1, 2022, Pina Colada and Lois Company purchased 12% bonds having a maturity value of $306,000 for $329,199.61. 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. Pina Colada 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 $327,000
2023 $315,000
(a)
Prepare the journal entries to record the interest received and recognition of fair value for 2022. (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. List all debit entries before credit entries. Round answers to 2 decimal places, e.g. 52.75.)
Date Account Titles and Explanation
Dec. 31
Dec. 31
(b).
eTextbook and Media
(To record collection of interest)
eTextbook
(To record fair value adjustment)
List of Accounts
Save for Later Last saved 1 second ago.
Saved work will be auto-submitted on the due date. Auto-
submission can take up to 10 minutes.
Dec. 31
Date Account Titles and Explanation
Dec. 31
Dec. 31
Prepare the journal entries to record the recognition of fair value for 2023 and assuming the investment is sold for $315,000 on
December 31, 2023, reclassifying any accumulated holding gains or losses to net income. (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. List all debit entries before credit entries. Round answers to 2 decimal places, e.g. 52.75.)
(To adjust to fair value at date of disposal)
(To record disposal)
Debit
(To reclassify holding loss)
Credit
Debit
Assistance Used
Attempts: 0 of 2 used
Submit Answer
Credit
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