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On September 1, Bridgeport Ltd. purchased $76,200 of five-year, 8% bonds for $67,584, resulting in an effective (yield) rate of 11%. The bonds pay interest each March 1 and September 1. Bridgeport applies ASPE, accounts for the investment under the amortized cost approach using the effective interest accounting policy, and has a December 31 year end. The following March 1, after receiving the semi-annual interest on the bonds, Bridgeport sells the bonds for $70,234.

On September 1, Bridgeport Ltd. purchased $76,200 of five-year, 8% bonds for $67,584, resulting in an effective (yield) rate of 11%. The bonds pay interest each March 1 and September 1. Bridgeport applies ASPE, accounts for the investment under the amortized cost approach using the effective interest accounting policy, and has a December 31 year end. The following March 1, after receiving the semi-annual interest on the bonds, Bridgeport sells the bonds for $70,234.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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7, please answer part d thanks

On September 1, Bridgeport Ltd. purchased $76,200 of five-year, 8% bonds for $67,584, resulting in an effective (yield) rate of 11%. The bonds pay interest each March 1 and September 1. Bridgeport applies ASPE, accounts for the investment under the amortized cost approach using the effective interest accounting policy, and has a December 31 year end. The following March 1, after receiving the semi-annual interest on the bonds, Bridgeport sells the bonds for $70,234. (a) Prepare Bridgeport's journal entry for the purchase of the investment. (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 debit entry before credit entry.) Your answer is correct. Sep. 1 (b) Date Account Titles and Explanation Bond Investment at Amortized Cost eTextbook and Media Cash List of Accounts Your answer is correct. Date Dec. 31 Account Titles and Explanation Interest Receivable Prepare Bridgeport's journal entry for any adjusting entry needed at December 31. (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. Round answers to O decimal places, e.g. 5,275.) Bond Investment at Amortized Cost Debit Interest Income 67584 Debit 2032 Credit 446 67584 Attempts: 1 of 3 used Credit 2478
Transcribed Image Text:On September 1, Bridgeport Ltd. purchased $76,200 of five-year, 8% bonds for $67,584, resulting in an effective (yield) rate of 11%. The bonds pay interest each March 1 and September 1. Bridgeport applies ASPE, accounts for the investment under the amortized cost approach using the effective interest accounting policy, and has a December 31 year end. The following March 1, after receiving the semi-annual interest on the bonds, Bridgeport sells the bonds for $70,234. (a) Prepare Bridgeport's journal entry for the purchase of the investment. (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 debit entry before credit entry.) Your answer is correct. Sep. 1 (b) Date Account Titles and Explanation Bond Investment at Amortized Cost eTextbook and Media Cash List of Accounts Your answer is correct. Date Dec. 31 Account Titles and Explanation Interest Receivable Prepare Bridgeport's journal entry for any adjusting entry needed at December 31. (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. Round answers to O decimal places, e.g. 5,275.) Bond Investment at Amortized Cost Debit Interest Income 67584 Debit 2032 Credit 446 67584 Attempts: 1 of 3 used Credit 2478
Prepare Bridgeport's journal entry for the receipt of interest on March 1. (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. Round answers to O decimal places, e.g. 5,275.) (d) Date Account Titles and Explanation Mar. 1 Cash Bond Investment at Amortized Cost Date Interest Receivable eTextbook and Media Mar. 1 Interest Income List of Accounts Your answer is partially correct. Account Titles and Explanation Cash Debit Bond Investment at Amortized Cost 3048 Prepare Bridgeport's journal entry for the sale of the bond investment on March 1. (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. Round answers to O decimal places, e.g. 5,275.) Debit 223 Credit 70234 2032 1239 Attempts: 1 of 3 used Credit
Transcribed Image Text:Prepare Bridgeport's journal entry for the receipt of interest on March 1. (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. Round answers to O decimal places, e.g. 5,275.) (d) Date Account Titles and Explanation Mar. 1 Cash Bond Investment at Amortized Cost Date Interest Receivable eTextbook and Media Mar. 1 Interest Income List of Accounts Your answer is partially correct. Account Titles and Explanation Cash Debit Bond Investment at Amortized Cost 3048 Prepare Bridgeport's journal entry for the sale of the bond investment on March 1. (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. Round answers to O decimal places, e.g. 5,275.) Debit 223 Credit 70234 2032 1239 Attempts: 1 of 3 used Credit
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