Presented below is an amortization schedule related to Flounder Company's 5-year, $160,000 bond with a 7% interest rate and a 5%yield, purchased on December 31, 2023, for $173,855.Date12/31/2312/31/24 $11,20012/31/2512/31/2612/31/2712/31/28CashInterestReceived RevenueAmortized costFair value11,20011,20011,20011,200$8,69312/31/24$171,348.8,5678,436170,8008,2988,151Bond PremiumAmortization$2,5072,633170,9002,7642,9023,049The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end.Carrying Amountof Bonds$173,855171,348167,800168,715165,951163,049160,00012/31/2512/31/26 12/31/27$168,715 $165,951 $163,049164,100LL12/31/28$160,000160,000 (a)(b)(c)(d)(e)(f)No.(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.)(a)(b)Prepare the journal entry to record the purchase of these bonds on December 31, 2023, assuming the bonds are classified asheld-to-maturity securities.Prepare the journal entry related to the held-to-maturity bonds for 2024.Prepare the journal entry related to the held-to-maturity bonds for 2026.Prepare the journal entry to record the purchase of these bonds, assuming they are classified as available-for-sale.Prepare the journal entries related to the available-for-sale bonds for 2024.Prepare the journal entries related to the available-for-sale bonds for 2026.DateAccount Titles and Explanation60,000HO SearchDELLODebitbCredit

No. Date Account Titles And Explanation Debit Credit (a) Dec. 31, 2023…

Presented below is an amortization schedule related to Flounder Company's 5-year, $160,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2023, for $173,855. Date 12/31/23 12/31/24 12/31/25 12/31/26 12/31/27 12/31/28 Cash Received Revenue $11,200 Fair value Amortized cost 11,200 11,200 11,200 Interest Bond Premium Amortization 11,200 $8,693 12/31/24 $171,348 8,567 8,436 170,800 8,298 8,151 $2,507 2,633 2,764 170,900 2,902 3,049 Carrying Amount of Bonds The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end. $173,855 167,800 171,348 168,715 165,951 163,049 160,000 12/31/25 12/31/26 12/31/27 $168,715 $165,951 $163,049 164,100 12/31/28 $160,000 160,000

Presented below is an amortization schedule related to Flounder Company's 5-year, $160,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2023, for $173,855. Date 12/31/23 12/31/24 12/31/25 12/31/26 12/31/27 12/31/28 Cash Received Revenue $11,200 Fair value Amortized cost 11,200 11,200 11,200 Interest Bond Premium Amortization 11,200 $8,693 12/31/24 $171,348 8,567 8,436 170,800 8,298 8,151 $2,507 2,633 2,764 170,900 2,902 3,049 Carrying Amount of Bonds The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end. $173,855 167,800 171,348 168,715 165,951 163,049 160,000 12/31/25 12/31/26 12/31/27 $168,715 $165,951 $163,049 164,100 12/31/28 $160,000 160,000

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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Question

Presented below is an amortization schedule related to Flounder Company's 5-year, $160,000 bond with a 7% interest rate and a 5%
yield, purchased on December 31, 2023, for $173,855.
Date
12/31/23
12/31/24 $11,200
12/31/25
12/31/26
12/31/27
12/31/28
Cash
Interest
Received Revenue
Amortized cost
Fair value
11,200
11,200
11,200
11,200
$8,693
12/31/24
$171,348.
8,567
8,436
170,800
8,298
8,151
Bond Premium
Amortization
$2,507
2,633
170,900
2,764
2,902
3,049
The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end.
Carrying Amount
of Bonds
$173,855
171,348
167,800
168,715
165,951
163,049
160,000
12/31/25
12/31/26 12/31/27
$168,715 $165,951 $163,049
164,100
LL
12/31/28
$160,000
160,000

(a)
(b)
(c)
(d)
(e)
(f)
No.
(List all debit entries before credit entries. Credit account titles are automatically indented when 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.)
(a)
(b)
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.
Prepare the journal entry related to the held-to-maturity bonds for 2024.
Prepare the journal entry related to the held-to-maturity bonds for 2026.
Prepare the journal entry to record the purchase of these bonds, assuming they are classified as available-for-sale.
Prepare the journal entries related to the available-for-sale bonds for 2024.
Prepare the journal entries related to the available-for-sale bonds for 2026.
Date
Account Titles and Explanation
60,000
H
O Search
DELL
O
Debit
b
Credit

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