On January 1, 2024, Ithaca Corporation purchases Cortland Incorporated bonds that have a face value of $210,000. The Cortland bonds have a stated interest rate of 10%. Interest is paid semiannually on June 30 and December 31, and the bonds mature in 10 years. For bonds of similar risk and maturity, the market yield on particular dates is as follows: Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) January 1, 2024 June 30, 2024 December 31, 2024 Required: 11.0% 12.0% 14.0% 1-a. Calculate the price Ithaca would have paid for the Cortland bonds on January 1, 2024 (ignoring brokerage fees). 1-b. Prepare a journal entry to record the purchase. 2. Prepare all appropriate journal entries related to the bond investment during 2024, assuming Ithaca accounts for the bonds as a held-to-maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. 3. Prepare all appropriate journal entries related to the bond investment during 2024, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3 Prepare all appropriate journal entries related to the bond investment during 2024, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number. View transaction list Journal entry worksheet 1 2 3 4 5 Record the fair value adjustment when the market yield is 12%. Note: Enter debits before credits. Date General Journal June 30, 2024 Loss on investment (unrealized, NI) Fair value adjustment Debit Credit Record entry Clear entry View general journal Show less▲ On January 1, 2024, Ithaca Corporation purchases Cortland Incorporated bonds that have a face value of $210,000. The Cortland bonds have a stated interest rate of 10%. Interest is paid semiannually on June 30 and December 31, and the bonds mature in 10 years. For bonds of similar risk and maturity, the market yield on particular dates is as follows: Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) January 1, 2024 June 30, 2024 December 31, 2024 Required: 11.0% 12.0% 14.0% 1-a. Calculate the price Ithaca would have paid for the Cortland bonds on January 1, 2024 (ignoring brokerage fees). 1-b. Prepare a journal entry to record the purchase. 2. Prepare all appropriate journal entries related to the bond investment during 2024, assuming Ithaca accounts for the bonds as a held-to-maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. 3. Prepare all appropriate journal entries related to the bond investment during 2024, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3 Prepare all appropriate journal entries related to the bond investment during 2024, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number. View transaction list Journal entry worksheet < 1 2 3 4 5 Record the fair value adjustment when the market yield is 14%. Note: Enter debits before credits. Date December 31, 2024 General Journal Debit Credit Loss on investment (unrealized, NI) Fair value adjustment Record entry Clear entry View general journal < Req 2 Req 3 > Show less▲

On January 1, 2024, Ithaca Corporation purchases Cortland Incorporated bonds that have a face value of $210,000. The Cortland bonds have a stated interest rate of 10%. Interest is paid semiannually on June 30 and December 31, and the bonds mature in 10 years. For bonds of similar risk and maturity, the market yield on particular dates is as follows: Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) January 1, 2024 June 30, 2024 December 31, 2024 Required: 11.0% 12.0% 14.0% 1-a. Calculate the price Ithaca would have paid for the Cortland bonds on January 1, 2024 (ignoring brokerage fees). 1-b. Prepare a journal entry to record the purchase. 2. Prepare all appropriate journal entries related to the bond investment during 2024, assuming Ithaca accounts for the bonds as a held-to-maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. 3. Prepare all appropriate journal entries related to the bond investment during 2024, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3 Prepare all appropriate journal entries related to the bond investment during 2024, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number. View transaction list Journal entry worksheet 1 2 3 4 5 Record the fair value adjustment when the market yield is 12%. Note: Enter debits before credits. Date General Journal June 30, 2024 Loss on investment (unrealized, NI) Fair value adjustment Debit Credit Record entry Clear entry View general journal Show less▲ On January 1, 2024, Ithaca Corporation purchases Cortland Incorporated bonds that have a face value of $210,000. The Cortland bonds have a stated interest rate of 10%. Interest is paid semiannually on June 30 and December 31, and the bonds mature in 10 years. For bonds of similar risk and maturity, the market yield on particular dates is as follows: Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) January 1, 2024 June 30, 2024 December 31, 2024 Required: 11.0% 12.0% 14.0% 1-a. Calculate the price Ithaca would have paid for the Cortland bonds on January 1, 2024 (ignoring brokerage fees). 1-b. Prepare a journal entry to record the purchase. 2. Prepare all appropriate journal entries related to the bond investment during 2024, assuming Ithaca accounts for the bonds as a held-to-maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. 3. Prepare all appropriate journal entries related to the bond investment during 2024, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3 Prepare all appropriate journal entries related to the bond investment during 2024, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number. View transaction list Journal entry worksheet < 1 2 3 4 5 Record the fair value adjustment when the market yield is 14%. Note: Enter debits before credits. Date December 31, 2024 General Journal Debit Credit Loss on investment (unrealized, NI) Fair value adjustment Record entry Clear entry View general journal < Req 2 Req 3 > Show less▲

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

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