On January 1, 2024, the Cook's Restaurant decides to invest in Lake Dimford bonds. The bonds mature on December 31, 2029, and pay interest on June 30 and December 31 at 6% annually. The market rate of interest was 6% on January 1, 2024, so the $140,000 maturity value bonds sold for face value. Cook's intends to hold the bonds until December 31, 2029. Requirement 1. Journalize the transactions related to Cook's investment in Lake Dimford bonds during 2024. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Begin by journalizing Cook's investment in Lake Dimford bonds on January 1, 2024. Date Accounts and Explanation 2024 Jan. 1 Next, journalize Cook's receipt of interest on June 30, 2024. Accounts and Explanation Date 2024 Jun. 30 Now journalize Cook's receipt of interest on December 31, 2024. Date Accounts and Explanation 2024 Dec. 31 Debit Debit Debit Credit Credit Credit Requirements 1. Journalize the transactions related to Cook's investment in Lake Dimford bonds during 2024. In what category would Cook's report the investment on the December 31, 2024, balance sheet? 2. Requirement 2. In what category would Cook's report the investment on the December 31, 2024, balance sheet? Cook's would report the investment as a(n) debt investment classified as a asset on the December 31, 2024, balance sheet.
On January 1, 2024, the Cook's Restaurant decides to invest in Lake Dimford bonds. The bonds mature on December 31, 2029, and pay interest on June 30 and December 31 at 6% annually. The market rate of interest was 6% on January 1, 2024, so the $140,000 maturity value bonds sold for face value. Cook's intends to hold the bonds until December 31, 2029. Requirement 1. Journalize the transactions related to Cook's investment in Lake Dimford bonds during 2024. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Begin by journalizing Cook's investment in Lake Dimford bonds on January 1, 2024. Date Accounts and Explanation 2024 Jan. 1 Next, journalize Cook's receipt of interest on June 30, 2024. Accounts and Explanation Date 2024 Jun. 30 Now journalize Cook's receipt of interest on December 31, 2024. Date Accounts and Explanation 2024 Dec. 31 Debit Debit Debit Credit Credit Credit Requirements 1. Journalize the transactions related to Cook's investment in Lake Dimford bonds during 2024. In what category would Cook's report the investment on the December 31, 2024, balance sheet? 2. Requirement 2. In what category would Cook's report the investment on the December 31, 2024, balance sheet? Cook's would report the investment as a(n) debt investment classified as a asset on the December 31, 2024, balance sheet.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![**Title: Accounting for Bond Investments**
**Overview:**
On January 1, 2024, Cook’s Restaurant decides to invest in Lake Dimford bonds. These bonds mature on December 31, 2029, and pay interest semi-annually on June 30 and December 31 at 6% annually. The market rate of interest was 6% on January 1, 2024, so the $140,000 maturity value bonds sold for face value. Cook's intends to hold the bonds until December 31, 2029.
**Requirements:**
1. Journalize the transactions related to Cook’s investment in Lake Dimford bonds during 2024.
2. Determine the category in which Cook’s would report the investment on the December 31, 2024, balance sheet.
---
**Requirement 1: Journal Entries for Cook’s Investment in 2024**
- **Transaction 1: Cook's Investment in Lake Dimford Bonds (January 1, 2024)**
- **Date:** 2024 Jan. 1
- **Accounts and Explanation:**
- [Debit Account: Name and Amount]
- [Credit Account: Name and Amount]
- **Transaction 2: Cook's Receipt of Interest (June 30, 2024)**
- **Date:** 2024 Jun. 30
- **Accounts and Explanation:**
- [Debit Account: Name and Amount]
- [Credit Account: Name and Amount]
- **Transaction 3: Cook's Receipt of Interest (December 31, 2024)**
- **Date:** 2024 Dec. 31
- **Accounts and Explanation:**
- [Debit Account: Name and Amount]
- [Credit Account: Name and Amount]
**Requirement 2: Balance Sheet Reporting**
- On December 31, 2024, Cook’s would report the investment as a(n) [Type of Asset: Choose from options] asset on the balance sheet.
---
**Explanation of Data Table:**
The tables provided are formatted for entering journal entries, including columns for date, accounts and explanation, and the debit and credit amounts. Each transaction related to the bond investment is recorded in the sequence it occurs (purchase and semi-annual interest receipts). The final requirement involves categorizing the investment on the balance sheet.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb4971acb-5e4c-4bbe-8a68-29fa1157d0f8%2Ffe163375-bea3-47f9-9e2d-b90b7c915c0a%2F63n387g_processed.png&w=3840&q=75)
Transcribed Image Text:**Title: Accounting for Bond Investments**
**Overview:**
On January 1, 2024, Cook’s Restaurant decides to invest in Lake Dimford bonds. These bonds mature on December 31, 2029, and pay interest semi-annually on June 30 and December 31 at 6% annually. The market rate of interest was 6% on January 1, 2024, so the $140,000 maturity value bonds sold for face value. Cook's intends to hold the bonds until December 31, 2029.
**Requirements:**
1. Journalize the transactions related to Cook’s investment in Lake Dimford bonds during 2024.
2. Determine the category in which Cook’s would report the investment on the December 31, 2024, balance sheet.
---
**Requirement 1: Journal Entries for Cook’s Investment in 2024**
- **Transaction 1: Cook's Investment in Lake Dimford Bonds (January 1, 2024)**
- **Date:** 2024 Jan. 1
- **Accounts and Explanation:**
- [Debit Account: Name and Amount]
- [Credit Account: Name and Amount]
- **Transaction 2: Cook's Receipt of Interest (June 30, 2024)**
- **Date:** 2024 Jun. 30
- **Accounts and Explanation:**
- [Debit Account: Name and Amount]
- [Credit Account: Name and Amount]
- **Transaction 3: Cook's Receipt of Interest (December 31, 2024)**
- **Date:** 2024 Dec. 31
- **Accounts and Explanation:**
- [Debit Account: Name and Amount]
- [Credit Account: Name and Amount]
**Requirement 2: Balance Sheet Reporting**
- On December 31, 2024, Cook’s would report the investment as a(n) [Type of Asset: Choose from options] asset on the balance sheet.
---
**Explanation of Data Table:**
The tables provided are formatted for entering journal entries, including columns for date, accounts and explanation, and the debit and credit amounts. Each transaction related to the bond investment is recorded in the sequence it occurs (purchase and semi-annual interest receipts). The final requirement involves categorizing the investment on the balance sheet.
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