### P17.4 (LO 1) (Debt Investments)Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale.| Date | Amortized Cost | Fair Value ||------------|----------------|------------|| 12/31/20 | $491,150 | $497,000 || 12/31/21 | $519,442 | $509,000 || 12/31/22 | $550,000 | $550,000 |### Instructionsa. **Indicate whether the bonds were purchased at a discount or at a premium.**b. **Prepare the adjusting entry to record the bonds at fair value at December 31, 2020.** The Fair Value Adjustment account has a debit balance of $1,000 prior to adjustment.c. **Prepare the adjusting entry to record the bonds at fair value at December 31, 2021.**

Journal entry is a primary entry that records the financial transactions initially.

Answered: P17.4 (LO 1) (Debt Investments)…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Please do not give solution in image format thanku
please answer this with must explanation , computation for each part and steps answer in text form
What is the interest income on the bond investment for the year 2022? What is the carrying amount of the bond investment on December 31, 2022?
Required Information P10-10 (Algo) Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5 [The following information applies to the questions displayed below.] On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds: Interest $ 1,661 ? ? 1,640 Date January 1, Year 1 End of Year 1 End of Year 2 End of Year 3 End of Year 4 -10-10 Part 3 Cash $ 1,792 ? ? Cash received ? Amortization $ 131 ? 145 ? Balance 32,566 32,435 32,297 ? 32,000 $ . How much cash was received on the day the bonds were issued (sold)?
Sh5
H1.
Am. 389.
A8
Presented below is the partial bond discount amortization schedule for Pharoah Corp. Pharoah uses the effective-interest method of amortization. Interest Periods Issue date 1 2 Interest to Be Paid $117,000 117,000 Interest Expense to Be Recorded $124,981 125,380 Discount Amortization $7,981 8,380 Unamortized Discount Debit $100,383 92,402 84,022 Bond Carrying Value Credit $2,499,617 2,507,598 (a) Prepare the journal entry to record the payment of interest and the discount amortization at the end of period 1. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation 2,515,978
Please don't provide answer in image format thank you
OurNewCO sold its Boring bond (AFS) for its fair value, $900,000) January 1, 2021. The balances from 12/31/2020 are follows: CASH REVENUE АMORT CV 885301 6/30/2020 50,000 53118.06 3,118 888,419 12/31/2020 50,000 53305.14 3,305 891,724 On 12/31/2020 the FV adjustment account had a debit balance of $8276. The face amount of the Boring Bonds is $1,000,000. Write out the journal entries needed to record this sale. Then complete the statements below.
P16.1 (LO 1) (Debt Securities) Presented below is an amortization schedule related to Spangler Company's 5-year, $100,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2023, for $108,660. Date Cash Received 12/31/23 12/31/24 $7,000 12/31/25 7,000 12/31/26 7,000 12/31/27 12/31/28 7,000 7,000 Interest Revenue $5,433 5,354 5,272 5,186 5,095 Bond Premium Amortization The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end. Instructions Amortized cost Fair value 12/31/24 $107,093 106,500 12/31/25 $105,447 107,500 $1,567 1,646 1,728 1,814 1,905 Carrying Amount of Bonds $108,660 107,093 105,447 103,719 101,905 100,000 12/31/26 $103,719 105,650 12/31/27 $101,905 103,000 a. Prepare the journal entry to record the purchase of these bonds on December 31, 2023, assuming the bonds are classified as held-to-maturity securities. b. Prepare the journal entry (entries) related to the held-to-maturity bonds for 2024. c. Prepare…

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS