Universal Foods issued 12% bonds, dated January 1, with a face amount of $155 million on January 1, 2021 to Wang Communications. The bonds mature on December 31, 2038 (15 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. Required: 1. to 3. Prepare the journal entries to record the purchase of the bonds by Wang Communications on January 1, 2024, interest revenue on June 30, 2024 and interest revenue on December 31, 2031.
Universal Foods issued 12% bonds, dated January 1, with a face amount of $155 million on January 1, 2021 to Wang Communications. The bonds mature on December 31, 2038 (15 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. Required: 1. to 3. Prepare the journal entries to record the purchase of the bonds by Wang Communications on January 1, 2024, interest revenue on June 30, 2024 and interest revenue on December 31, 2031.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Universal Foods issued 12% bonds, dated January 1, with a face amount of $155 million on January
1, 2021 to Wang Communications. The bonds mature on December 31, 2038 (15 years). The market rate
of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31.
Universal uses the straight-line method. Required: 1. to 3. Prepare the journal entries to record the
purchase of the bonds by Wang Communications on January 1, 2024, interest revenue on June 30, 2024
and interest revenue on December 31, 2031.
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