On July 1, 2024, Monty Corporation, a private company, purchased $369,600 of six-year, 5% Star Corporation bonds for $390,000. The bonds pay interest each June 30. The bonds were purchased to earn interest and the market interest rate at the time of purchase was 4%. The company uses the effective-interest method to amortize any premium or discount on debt security investments. Prepare the required journal entries on July 1 and December 31, 2024, and June 30, 2025. (Record entries in the order displayed in the problem statement. 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 0 for the amounts. List all debit entries before credit entries.) Date 2024 July 1 Dec. 31 2025 June 30 Account Titles and Explanation Investments at Amortized Cost Cash Interest Receivable Investments at Amortized Cost Interest Revenue Cash Investments at Amortized Cost Interest Revenue Debit 390,000 1000 Credit 390,000 700 701
On July 1, 2024, Monty Corporation, a private company, purchased $369,600 of six-year, 5% Star Corporation bonds for $390,000. The bonds pay interest each June 30. The bonds were purchased to earn interest and the market interest rate at the time of purchase was 4%. The company uses the effective-interest method to amortize any premium or discount on debt security investments. Prepare the required journal entries on July 1 and December 31, 2024, and June 30, 2025. (Record entries in the order displayed in the problem statement. 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 0 for the amounts. List all debit entries before credit entries.) Date 2024 July 1 Dec. 31 2025 June 30 Account Titles and Explanation Investments at Amortized Cost Cash Interest Receivable Investments at Amortized Cost Interest Revenue Cash Investments at Amortized Cost Interest Revenue Debit 390,000 1000 Credit 390,000 700 701
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On July 1, 2024, Monty Corporation, a private company, purchased $369,600 of six-year, 5% Star Corporation bonds for $390,000.
The bonds pay interest each June 30. The bonds were purchased to earn interest and the market interest rate at the time of purchase
was 4%. The company uses the effective-interest method to amortize any premium or discount on debt security investments.
Prepare the required journal entries on July 1 and December 31, 2024, and June 30, 2025. (Record entries in the order displayed in the
problem statement. 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.)
Date
2024
July 1
Dec. 31 V
2025
June 30
v
Account Titles and Explanation
Investments at Amortized Cost
Cash
Interest Receivable
Investments at Amortized Cost
Interest Revenue
Cash
Investments at Amortized Cost V
Interest Revenue
Interest Receivable
V
V
Debit
390,000
Credit
390,000
100
1001
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