Current Attempt in ProgressOn January 1, 2025, Cheyenne Company purchased 12% bonds having a maturity value of $278,000 for $299,076.51. The bondsprovide the bondholders with a 10% yield. They are dated January 1, 2025, and mature January 1, 2030, with interest received onJanuary 1 of each year. Cheyenne Company uses the effective-interest method to allocate unamortized discount or premium. Thebonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows.202520262027(a)(b)(c)No.$296,600$287,300 2029(a)$286,2002028(List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. Ifno entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to 2 decimal places, e.g. 1225.25.)$288,200$278,000Prepare the journal entry at the date of the bond purchase.Prepare the journal entries to record the interest revenue and recognition of fair value for 2025.Prepare the journal entry to record the recognition of fair value for 2026.DateAccount Titles and ExplanationO SearchrDebitOICredit

Bond: A bond is a type of debt financial instrument with a maturity of two years or more.…

On January 1, 2025, Cheyenne Company purchased 12% bonds having a maturity value of $278,000 for $299,076.51. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2025, and mature January 1, 2030, with interest received on January 1 of each year. Cheyenne Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2025 $296,600 2028 2026 $287,300 2029 2027 (a) (b) (c) $286,200 $288,200 $278,000 Prepare the journal entry at the date of the bond purchase. Prepare the journal entries to record the interest revenue and recognition of fair value for 2025. Prepare the journal entry to record the recognition of fair value for 2026. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If colort "No Entry" for the account titles and enter O for the amounts. Round answers to 2 decimal places, e.g. 1225.25.)

On January 1, 2025, Cheyenne Company purchased 12% bonds having a maturity value of $278,000 for $299,076.51. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2025, and mature January 1, 2030, with interest received on January 1 of each year. Cheyenne Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2025 $296,600 2028 2026 $287,300 2029 2027 (a) (b) (c) $286,200 $288,200 $278,000 Prepare the journal entry at the date of the bond purchase. Prepare the journal entries to record the interest revenue and recognition of fair value for 2025. Prepare the journal entry to record the recognition of fair value for 2026. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If colort "No Entry" for the account titles and enter O for the amounts. Round answers to 2 decimal places, e.g. 1225.25.)

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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Subject: accounting
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