* Smith Company acquired $3,510,000 face value, 10% bonds as an available for sale investment on January 1 of the current year when the market rate of interest was 12% Interest is paid annually each December 31. Smith purchased the bonds, which mature in 12 years, for $3,075,155 Smith amortizes the discount using the effective interest rate method The fair value of the bonds at the end of the year is $3,011,000. Prepare the journal entries required on the date of acquisition and at the end of the first year after acquisition (Record debits first, then credits. Exclude explanations from any journal entries.) Prepare the journal entry required on the date of acquisition Account -CITD January 1
* Smith Company acquired $3,510,000 face value, 10% bonds as an available for sale investment on January 1 of the current year when the market rate of interest was 12% Interest is paid annually each December 31. Smith purchased the bonds, which mature in 12 years, for $3,075,155 Smith amortizes the discount using the effective interest rate method The fair value of the bonds at the end of the year is $3,011,000. Prepare the journal entries required on the date of acquisition and at the end of the first year after acquisition (Record debits first, then credits. Exclude explanations from any journal entries.) Prepare the journal entry required on the date of acquisition Account -CITD January 1
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Smith Company acquired $3,510,000 face value, 10% bonds as an available-for-sale investment on January 1 of the current year when the market rate of interest was 12% Interest is
paid annually each December 31. Smith purchased the bonds, which mature in 12 years, for $3,075,155 Smith amortizes the discount using the effective interest rate method. The fair
value of the bonds at the end of the year is $3,011,000. Prepare the journal entries required on the date of acquisition and at the end of the first year after acquisition (Record
debits first, then credits. Exclude explanations from any journal entries.)
Prepare the journal entry required on the date of acquisition
Account
-COTE-
January 1
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