SecurityAtlanta Corp., 5%Oct. 1, Year 1Dallas Inc. bonds, 4% Jul. 1, Year 1Entries and FS Presentation for Year 1DateJan. 2, Year 2 CashPurchaseDateDateJan. 3, Year 2e. Record the entry to sell the Atlanta Corp. bonds on January 2 of Year 2 for $90,000.Original PurchasePrice at ParDateDec. 31, Year 2CashInvestment in TSInterest RevenueTo record the sale of investments.$80,00040,000Account Namef. Record the entry to sell the Dallas Inc. bonds on January 3 of Year 2 for $35,600.Account NameTo record the sale of investments.Income StatementNet gain (loss) on investment $Interest revenue$To adjust the FVA account.Account NameEntries and FS Presentation for Year 2g. Adjust the Fair Value Adjustment account on December 31 of Year 2.Note: Indicate a loss with a negative sign.Year 1x $0 x $Debit90,00000Year 20 x0✓Debit35,60000Debith. Determine the investment related impact on net income in Year 1 and Year 2.Credit000✔89,000 *1,000 xCreditCredit0✔0x0 x0 x0 x

These are the entries prepared to record the business transactions in the books of the company. The…

Purchase Original Purchase Date Price at Par Security Atlanta Corp., 5% Oct. 1, Year 1 Dallas Inc. bonds, 4% Jul. 1, Year 1 Entries and FS Presentation for Year 1 Date Jan. 2, Year 2 Cash $80,000 40,000 e. Record the entry to sell the Atlanta Corp. bonds on January 2 of Year 2 for $90,000. Account Name Entries and FS Presentation for Year 2 Investment in TS Interest Revenue To record the sale of investments. > > > Debit 90,000 0 0 Credit 0 89,000 * 1,000 *

Purchase Original Purchase Date Price at Par Security Atlanta Corp., 5% Oct. 1, Year 1 Dallas Inc. bonds, 4% Jul. 1, Year 1 Entries and FS Presentation for Year 1 Date Jan. 2, Year 2 Cash $80,000 40,000 e. Record the entry to sell the Atlanta Corp. bonds on January 2 of Year 2 for $90,000. Account Name Entries and FS Presentation for Year 2 Investment in TS Interest Revenue To record the sale of investments. > > > Debit 90,000 0 0 Credit 0 89,000 * 1,000 *

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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Amortize Premium by Interest Method Shunda Corporation wholesales parts to appliance manufacturers. On January 1, Shunda issued $30,000,000 of five-year, 10% bonds at a market (effective) interest rate of 8%, receiving cash of $32,433,150. Interest is payable semiannually. Shunda’s fiscal year begins on January 1. The company uses the interest method. a. Journalize the entries to record the following: 1. Sale of the bonds. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. 2. First semiannual interest payment, including amortization of premium. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. 3. Second semiannual interest payment, including amortization of premium. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. b. Determine…
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PART 1 Recording Entries for AFS Debt Securities— Effective Interest Method Adjust FVA at Year-End On July 1, 2020, West Company purchased for cash, twelve $10,000 bonds of North Corporation to yield 10%. The bonds pay 9% interest, payable on a semiannual basis each July 1 and January 1, and mature on July 1, 2023. The bonds are classified as AFS securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discount or premium. Amortization Schedule - PART 1 Journal Entries and FS Presentation for 2020 - PART 1 Journal Entries for 2021 - PART 2 a. Prepare a bond amortization schedule for 2020 and 2021 using the effective interest method. Note: Round each amount entered into the schedule to the nearest whole dollar. Date StatedInterest MarketInterest DiscountAmortization BondAmortized Cost Jul. 1, 2020 Answer Jan. 1, 2021 Answer Answer Answer Answer Jul. 1, 2021 Answer Answer Answer Answer b.…
Bond Premium, Entries for Bonds Payable Transactions Instructions Present Value Tables Chart of Accounts Journal Final Questions Instructions O'Halloran Inc. produces and sells outdoor equipment. On July 1, Year 1, O'Halloran Inc. issued $32,000,000 of six-year, 8% bonds at a market (effective) interest rate of 7%, receiving cash of $33,546,022. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.* 2. Journalize the entries to record the following:* a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. 3. Determine the total interest…
Question Content Area Oak Branch Inc. issued $860,000 of 7%, 10-year bonds when the market rate was 6%. They received $923,988. Interest was paid semi-annually. Prepare an amortization table for the first three years of the bonds. Round intermediate and final answers to whole dollar amount. Cash InterestPayment Interest onCarrying Value Amortization ofPremium Carrying Value Jan. 1, Year 1 $fill in the blank 1 June 30, Year 1 $fill in the blank 2 $fill in the blank 3 $fill in the blank 4 fill in the blank 5 Dec. 31, Year 1 fill in the blank 6 fill in the blank 7 fill in the blank 8 fill in the blank 9 June 30, Year 2 fill in the blank 10 fill in the blank 11 fill in the blank 12 fill in the blank 13 Dec. 31, Year 2 fill in the blank 14 fill in the blank 15 fill in the blank 16 fill in the blank 17 June 30, Year 3 fill in the blank 18 fill in the blank 19 fill in the blank 20 fill in the…
Apr.1Purchased for cash $372,000 of Vasquez City 3% bonds at 100 plus accrued interest of $2,790. June30Received first semiannual interest payment. July31Sold $139,200 of the bonds at 98 plus accrued interest of $348. Aug.1Received face value of remaining bonds at their maturity. Required: Journalize the entries to record the above selected bond investment transactions for Beacon Trust. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
-k A 0 nces Smith Co.'s long-term available-for-sale portfolio at the start of this year consists of the following. Available for Sale Securities Cost $ 576,530 163,300 Fair Value $ 498,150 Company A bonds Company B notes 159,750 Company C bonds. 641,750 723,930 Smith enters into the following transactions involving its available-for-sale debt securities this year. January 29 July 6 November 13 Sold one-half of the notes of Company B for $80,940. Purchased bonds of Company X for $126,800. Purchased notes of Company 2 for $210,000. December 9 Sold all of the bonds of Company A for $564,999. Fair values at December 31 are: B, $83,300; C.$646,000; X, $119,000; and Z. $217,000. Requirement General Journal Fair Value Transaction Adjustment Analysis Prepare journal entries to record each of the transactions and events. Prepare the year-end adjustment to fair value, if a View transaction list General Ledger Journal entry worksheet < Trial Balance Note: Enter debits before credits. 5 Using the…
ASsignmentiMain.do?invoker=& takeAssignmentSessionLocator%3D&inprogress%-false rk eBook Calculator Print Item Compute Bond Proceeds, Amortizing Premium by Interest Method, and Interest Expense Ware Co. produces and sells motorcycle parts. On the first day of its fiscal year, Ware Co. issued $90,000,000 of five-year, 12% bonds at a market (effective) interest rate of 10%, with interest payable semiannually. Compute the following: a. The amount of cash proceeds from the sale of the bonds. Use the tables of present values in Exhibit 8 and Exhibit 10. Round to the nearest dollar. b. The amount of premium to be amortized for the first semiannual interest payment period, using the interest method. Round to the nearest dollar. C. The amount of premium to be amortized for the second semiannual interest payment period, using the interest method. Round to the nearest dollar. d. The amount of the bond interest expense for the first year. Round to the nearest dollar. SHEET.A... SHEET KSHEET.A...…
Recording Entries for TS—Effective Interest Method Adjust FVA at Year-End On July 1, 2020, West Company purchased for cash, fifteen $10,000 bonds of North Corporation at a market rate of 6%. The bonds pay 5% interest, payable on a semiannual basis each July 1 and January 1, and mature on July 1, 2023. The bonds are classified as trading securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discounts or premiums. Ignore income taxes. Amortization Schedule Journal Entries in 2020 Journal Entries in 2021 a. Prepare a bond amortization schedule for the life of the bonds using the effective interest method. Note: Round each amount entered into the schedule to the nearest whole dollar. Use the rounded amount for later calculations in the schedule. Adjust market interest in the final year of the bond term for any net rounding difference. Date StatedInterest MarketInterest DiscountAmortization BondAmortized Cost Jul.…
Exercise 10-5 (Algo) Straight-Line: Recording bond issuance and discount amortization LO P2 Paulson Company issues 6%, four-year bonds, on January 1 of this year, with a par value of $90,000 and semiannual interest payments. Semiannual Period-End (0) January 1, issuance (1) June 30, first payment (2) December 31, second payment Unamortized Discount $ 6,533 5,716 4,899 Carrying Value $ 83,467 84,284 85,101 Use the above straight-line bond amortization table and prepare journal entries for the following. (a) The issuance of bonds on January 1. (b) The first interest payment on June 30. (c) The second interest payment on December 31. View transaction list Journal entry worksheet 1 2 3 Record the issuance of the bonds on January 1. Note: Enter debits before credits. Date January 01 General Journal Debit Credit