Apr.1Purchased $100,000 of Welch Co. 6%, 15-year bonds at their face amount plus accrued interest of $500. The bonds pay interest semiannually on March 1 and September 1.June1Purchased $210,000 of Bailey 4%, 10-year bonds at their face amount plus accrued interest of $700. The bonds pay interest semiannually on May 1 and November 1.Sept.1Received semiannual interest on the Welch Co. bonds. 30Sold $40,000 of Welch Co. bonds at 97 plus accrued interest of $200.Nov.1Received semiannual interest on the Bailey bonds.Dec.31Accrued interest on the Welch Co. bonds. 31Accrued interest on the Bailey bonds.

The question is based on the concept of Financial Accounting.

Answered: r. 1 Purchased $100,000 of Welch Co.…

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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Assume that on July 1, Jerome, Incorporated, paid $100,000 to buy Potter's 8 percent, two-year bonds with a $ bonds pay interest semiannually on December 31 and June 30. Jerome intends to hold the bonds until they ma Complete the necessary December 31 entry to record receipt of interest by selecting the account names from and entering dollar amounts in the debit and credit columns. View transaction list Journal entry worksheet 1 Assume that on July 1, Jerome, Inc., paid $100,000 to buy Potter's 8 percent, two-year bonds with a $100,000 par value. The bonds pay interest semiannually on December 31 and June 30. Jerome intends to hold the bonds until they mature. Complete the necessary December 31 entry to record Note: Enter debits before credits. Date Dec. 31 General Journal Debit Credit
On May 1, Knox Inc. purchases $100,000 of 10-year, 6% Madison Corporation bonds dated March 1 at 100 plus accrued interest. Journalize the entry to record the bond purchase
Jones Company issued $50,000, 5 year, 8% bonds at 98 ¼ plus accrued interest. The interest is paid semiannually on March 1 and September 1. The bonds are dated March 1, Year 1. The date of sale is May 1, Year 1 Make the journal entry to record the accrued interest at year end on December 31. year 1.
Salt Foods purchases forty $1,000, 7%, 10-year bonds issued by Pretzelmania, Inc., for $40,000 on January 1. The market interest rate for bonds of similar risk and maturity is 7%. Salt Foods receives interest semiannually on June 30 and December 31.1. & 2. Record the necessary entries regarding the bonds.
On July 1 of Year 1, West Company purchased for cash, 8, $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 in three years on July 1. The bonds are classified as AFS securities. West Company's annual reporting period ends December 31. Assume the effective interest method of amortization of any discount or premium. Note: When answering the following questions, round each amount to the nearest whole dollar. Amortization Schedule Journal Entries and Financial Statement Presentation for Year 1 a. Prepare a bond amortization schedule for Year 1 and Year 2 using the effective interest method. Discount Amortization Date Jul 1, Year 1 Jan. 1, Year 2 s Jul 1, Year 2 Stated Interest 8,100 $ 8,100x Market Interest 8,772 x 8.805 672 x 705 Bond Amortized Cost 175,433 X 176,104 x 176,810 x Journal Entries for Year 2
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Hsu Company issued $102,000 of 10% bonds on January 1 at face value. The bonds pay interest semiannually on January 1 and July 1. The total interest expense related to these bonds for the first year ended December 31 is O a. $5,100. Ob. $2,550 OC. S10,200. Od. S15,300.
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Apr.	1	Purchased $100,000 of Welch Co. 6%, 15-year bonds at their face amount plus accrued interest of $500. The bonds pay interest semiannually on March 1 and September 1.
June	1	Purchased $210,000 of Bailey 4%, 10-year bonds at their face amount plus accrued interest of $700. The bonds pay interest semiannually on May 1 and November 1.
Sept.	1	Received semiannual interest on the Welch Co. bonds.
	30	Sold $40,000 of Welch Co. bonds at 97 plus accrued interest of $200.
Nov.	1	Received semiannual interest on the Bailey bonds.
Dec.	31	Accrued interest on the Welch Co. bonds.
	31	Accrued interest on the Bailey bonds.