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Rekya Mart Inc. is a general merchandise retail company that began operations on January 1, 20Y5. The following are bond (held-to-maturity) transactions by Rekya Mart Inc., which has a fiscal year ending on December 31: 2015 Apr. May Aug. Sept. Nov. Dec. 1. Purchased $90,000 of Smoke Bay 6%, 10-year bonds at their face amount plus accrued interest of $900. The bonds pay interest semiannually on February 1 and August 1. 16. 1. 1. 1. 31. Purchased $42,000 of Geotherma Co. 4%, 12-year bonds at their face amount plus accrued interest of $70. The bonds pay interest semiannually on May 1 and November 1. Received semiannual interest on the Smoke Bay bonds. Sold $12,000 of Smoke Bay bonds at 101 plus accrued interest of $60. Received semiannual interest on the Geotherma Co. bonds. Accrued interest on the Smoke Bay bonds.

Rekya Mart Inc. is a general merchandise retail company that began operations on January 1, 20Y5. The following are bond (held-to-maturity) transactions by Rekya Mart Inc., which has a fiscal year ending on December 31: 2015 Apr. May Aug. Sept. Nov. Dec. 1. Purchased $90,000 of Smoke Bay 6%, 10-year bonds at their face amount plus accrued interest of $900. The bonds pay interest semiannually on February 1 and August 1. 16. 1. 1. 1. 31. Purchased $42,000 of Geotherma Co. 4%, 12-year bonds at their face amount plus accrued interest of $70. The bonds pay interest semiannually on May 1 and November 1. Received semiannual interest on the Smoke Bay bonds. Sold $12,000 of Smoke Bay bonds at 101 plus accrued interest of $60. Received semiannual interest on the Geotherma Co. bonds. Accrued interest on the Smoke Bay bonds.

FINANCIAL ACCOUNTING
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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20Y6 Feb. May 31. 2. 1. INSTRUCTIONS 1. Received semiannual interest on the Smoke Bay bonds. Bay bonds. Accrued interest on the Geotherma Co. bonds. Received semiannual interest on the Geotherma Co. bonds. 1. Journalize the entries to record the preceding transactions. If the bond portfolio is classified as an available-for-sale investment, how would it be reported on the financial statements?
Transcribed Image Text:20Y6 Feb. May 31. 2. 1. INSTRUCTIONS 1. Received semiannual interest on the Smoke Bay bonds. Bay bonds. Accrued interest on the Geotherma Co. bonds. Received semiannual interest on the Geotherma Co. bonds. 1. Journalize the entries to record the preceding transactions. If the bond portfolio is classified as an available-for-sale investment, how would it be reported on the financial statements?
Rekya Mart Inc. is a general merchandise retail company that began operations on January 1, 20Y5. The following are bond (held-to-maturity) transactions by Rekya Mart Inc., which has a fiscal year ending on December 31: 20Y5 Apr. May Aug. Sept. Nov. Dec. 1. Purchased $90,000 of Smoke Bay 6%, 10-year bonds at their face amount plus accrued interest of $900. The bonds pay interest semiannually on February 1 and August 1. 16. 1. 1. 1. 31. Purchased $42,000 of Geotherma Co. 4%, 12-year bonds at their face amount plus accrued interest of $70. The bonds pay interest semiannually on May 1 and November 1. Received semiannual interest on the Smoke Bay bonds. Sold $12,000 of Smoke Bay bonds at 101 plus accrued interest of $60. Received semiannual interest on the Geotherma Co. bonds. Accrued interest on the Smoke Bay bonds.
Transcribed Image Text:Rekya Mart Inc. is a general merchandise retail company that began operations on January 1, 20Y5. The following are bond (held-to-maturity) transactions by Rekya Mart Inc., which has a fiscal year ending on December 31: 20Y5 Apr. May Aug. Sept. Nov. Dec. 1. Purchased $90,000 of Smoke Bay 6%, 10-year bonds at their face amount plus accrued interest of $900. The bonds pay interest semiannually on February 1 and August 1. 16. 1. 1. 1. 31. Purchased $42,000 of Geotherma Co. 4%, 12-year bonds at their face amount plus accrued interest of $70. The bonds pay interest semiannually on May 1 and November 1. Received semiannual interest on the Smoke Bay bonds. Sold $12,000 of Smoke Bay bonds at 101 plus accrued interest of $60. Received semiannual interest on the Geotherma Co. bonds. Accrued interest on the Smoke Bay bonds.
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