Presented below is an amortization schedule related to Pearl Company's 5-year, $140,000 bondwith a 7% interest rate and a 5% yield, purchased on December 31, 2015, for $152,123.Cash InterestDate Received Revenue12/31/1512/31/16 $9,800 $7,606 $2,19412/31/17 9,80012/31/18 9,80012/31/19 9,800 7,260 2,54012/31/20 9,800 7,134 2,666Amortized costBondPremiumAmortizationFair value7,496 2,3042,4197,381CarryingAmountof Bonds$152,123149,929147,625145,206142,666The following schedule presents a comparison of the amortized cost and fair value of the bondsat year-end:140,00012/31/16$149,929 $147,625$145,206$142,666$149,300 $149,800 $147,000 $143,800 $140,00012/31/17 12/31/1812/31/1912/31/20$140,000 (a) Prepare the journal entry to record the purchase of these bonds on December 31, 2015,assuming the bonds are classified as held-to-maturity securities.(b) Prepare the journal entry related to the held-to-maturity bonds for 2016.(c) Prepare the journal entry related to the held-to-maturity bonds for 2018.(d) Prepare the journal entry to record the purchase of these bonds, assuming they areclassified as available-for-sale.(e) Prepare the journal entries related to the available-for-sale bonds for 2016.(f) Prepare the journal entries related to the available-for-sale bonds for 2018.

As per the Honor code of Bartleby we are bound to give the answer of the first three sub parts only,…

Presented below is an amortization schedule related to Pearl Company's 5-year, $140,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2015, for $152,123. Date 12/31/15 Cash Interest Received Revenue 12/31/16 $9,800 $7,606 $2,194 12/31/17 9,800 7,496 2,304 12/31/18 9,800 7,381 2,419 12/31/19 9,800 12/31/20 9,800 Amortized cost Fair value 7,260 Bond Premium Amortization 7,134 2,666 12/31/16 2,540 $149,929 Carrying Amount of Bonds The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end: $152,123 $149,300 $149,800 149,929 147,625 145,206 142,666 140,000 12/31/17 12/31/18 12/31/19 $147,625 $145,206 $142,666 $147,000 $143,800 12/31/20 $140,000 $140,000

Presented below is an amortization schedule related to Pearl Company's 5-year, $140,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2015, for $152,123. Date 12/31/15 Cash Interest Received Revenue 12/31/16 $9,800 $7,606 $2,194 12/31/17 9,800 7,496 2,304 12/31/18 9,800 7,381 2,419 12/31/19 9,800 12/31/20 9,800 Amortized cost Fair value 7,260 Bond Premium Amortization 7,134 2,666 12/31/16 2,540 $149,929 Carrying Amount of Bonds The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end: $152,123 $149,300 $149,800 149,929 147,625 145,206 142,666 140,000 12/31/17 12/31/18 12/31/19 $147,625 $145,206 $142,666 $147,000 $143,800 12/31/20 $140,000 $140,000

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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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

Presented below is an amortization schedule related to Pearl Company's 5-year, $140,000 bond
with a 7% interest rate and a 5% yield, purchased on December 31, 2015, for $152,123.
Cash Interest
Date Received Revenue
12/31/15
12/31/16 $9,800 $7,606 $2,194
12/31/17 9,800
12/31/18 9,800
12/31/19 9,800 7,260 2,540
12/31/20 9,800 7,134 2,666
Amortized cost
Bond
Premium
Amortization
Fair value
7,496 2,304
2,419
7,381
Carrying
Amount
of Bonds
$152,123
149,929
147,625
145,206
142,666
The following schedule presents a comparison of the amortized cost and fair value of the bonds
at year-end:
140,000
12/31/16
$149,929 $147,625
$145,206
$142,666
$149,300 $149,800 $147,000 $143,800 $140,000
12/31/17 12/31/18
12/31/19
12/31/20
$140,000

(a) Prepare the journal entry to record the purchase of these bonds on December 31, 2015,
assuming the bonds are classified as held-to-maturity securities.
(b) Prepare the journal entry related to the held-to-maturity bonds for 2016.
(c) Prepare the journal entry related to the held-to-maturity bonds for 2018.
(d) Prepare the journal entry to record the purchase of these bonds, assuming they are
classified as available-for-sale.
(e) Prepare the journal entries related to the available-for-sale bonds for 2016.
(f) Prepare the journal entries related to the available-for-sale bonds for 2018.

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