Progress On January 1, 2025, Ivanhoe Company purchased 12% bonds having a maturity value of $312,000 for $335,654.22. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2025, and mature January 1, 2030, with interest received on January 1 of each year. Ivanhoe Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available for sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2025 $333,600 2028 $322.000 2026 $320,900 2029 $312.000 2027 $320,000 (a) (b) (c) Prepare the journal entry at the date of the bond purchase. Prepare the journal entries to record the interest revenue and recognition of fair value for 2025. Prepare the journal entry to record the recognition of fair value for 2026. (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. Round answers to 2 decimal places, eg 1225.25)
Progress On January 1, 2025, Ivanhoe Company purchased 12% bonds having a maturity value of $312,000 for $335,654.22. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2025, and mature January 1, 2030, with interest received on January 1 of each year. Ivanhoe Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available for sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2025 $333,600 2028 $322.000 2026 $320,900 2029 $312.000 2027 $320,000 (a) (b) (c) Prepare the journal entry at the date of the bond purchase. Prepare the journal entries to record the interest revenue and recognition of fair value for 2025. Prepare the journal entry to record the recognition of fair value for 2026. (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. Round answers to 2 decimal places, eg 1225.25)
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
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 16E
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