(b)(c)(To record interest received)(To record fair value adjustment)unu On January 1, 2025, Sage Company purchased 12% bonds having a maturity value of $284,000 for $305,531.40. The bonds providethe bondholders with a 10% yield. They are dated January 1, 2025, and mature January 1, 2030, with interest received on January 1 ofeach year. Sage Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified asavailable-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows.202520262027(a)(b)(C)No.$303,400 2028$292,200 2029$291,200(a)(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.)$293,200$284,000Prepare 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 ExplanationDebitCredi

The bonds can be defined as corporate debt units and these units are the tradable assets. the…

On January 1, 2025, Sage Company purchased 12% bonds having a maturity value of $284,000 for $305,531.40. 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. Sage 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 2026 2027 $303,400 2028 $292,200 2029 $291,200 $293,200 $284,000 (a) Prepare the journal entry at the date of the bond purchase. (b) Prepare the journal entries to record the interest revenue and recognition of fair value for 2025. (c) Prepare the journal entry to record the recognition of fair value for 2026.

On January 1, 2025, Sage Company purchased 12% bonds having a maturity value of $284,000 for $305,531.40. 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. Sage 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 2026 2027 $303,400 2028 $292,200 2029 $291,200 $293,200 $284,000 (a) Prepare the journal entry at the date of the bond purchase. (b) Prepare the journal entries to record the interest revenue and recognition of fair value for 2025. (c) Prepare the journal entry to record the recognition of fair value for 2026.

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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