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 value(a)(b)11,20011,20011,20011,200$8,69312/31/24$171,3488,5678,436170,8008,2988,151Bond 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$173,855171,348168,715165,951163,049160,00012/31/25 12/31/26 12/31/27$168,715$165,951167,80012/31/28$163,049 $160,000164,100160,000Prepare 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. Amortized costFair value(a)(b)(c)(d)(e)(f)No.(a)12/31/24 12/31/25(b)$171,348170,800$168,715Date170,90012/31/26 12/31/27 12/31/28$165,951 $163,049$160,000(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.)167,800Prepare 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.O Search164,100Account Titles and Explanation160,000DOLLDebit3Credit

Bond: A bond is a type of debt financial instrument with a maturity of two years or more.…

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 (a) 11,200 11,200 11,200 11,200 $8,693 12/31/24 $171,348 8,567 170,800 8,436 8,298 8,151 Bond Premium Amortization $2,507 2,633 2,764 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. 12/31/25 12/31/26 $168,715 $165,951 170,900 167,800 $173,855 171,348 168,715 165,951 163,049 160,000 12/31/27 $163,049 164,100 12/31/28 $160,000 160,000 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.

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 (a) 11,200 11,200 11,200 11,200 $8,693 12/31/24 $171,348 8,567 170,800 8,436 8,298 8,151 Bond Premium Amortization $2,507 2,633 2,764 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. 12/31/25 12/31/26 $168,715 $165,951 170,900 167,800 $173,855 171,348 168,715 165,951 163,049 160,000 12/31/27 $163,049 164,100 12/31/28 $160,000 160,000 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.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 1MC

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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
(a)
(b)
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
168,715
165,951
163,049
160,000
12/31/25 12/31/26 12/31/27
$168,715
$165,951
167,800
12/31/28
$163,049 $160,000
164,100
160,000
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.

Amortized cost
Fair value
(a)
(b)
(c)
(d)
(e)
(f)
No.
(a)
12/31/24 12/31/25
(b)
$171,348
170,800
$168,715
Date
170,900
12/31/26 12/31/27 12/31/28
$165,951 $163,049
$160,000
(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.)
167,800
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.
O Search
164,100
Account Titles and Explanation
160,000
DOLL
Debit
3
Credit

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