Use the following data for problems 4 - 6: Purchase of Bonds as Investment: Beta Company purchased $400,000 of 8 percent bonds of Star Corporation on January 1, 2011, at a discount, paying $359,118. The bonds mature January 1, 2016 and yield 10% interest payable each July 1 and January 1. 4) Record the Journal entry on Beta's books for purchase of the bonds: 5) Record the receipt by Beta of the first semi-annual interest payment (note: you must calculate the amount of the bond discount amortization pertaining to the first semi-annual payment) 6. Assume that Beta Company sells its investment in Star bonds on November 1, 2015, at 99% plus accrued interest. Record the journal entry to accrue the interest revenue and discount amortization (4 months). Assume that the bond discount amortization at December 31 would have been $3,035. (Also, refer to the table attached)
Use the following data for problems 4 - 6: Purchase of Bonds as Investment: Beta Company purchased $400,000 of 8 percent bonds of Star Corporation on January 1, 2011, at a discount, paying $359,118. The bonds mature January 1, 2016 and yield 10% interest payable each July 1 and January 1. 4) Record the Journal entry on Beta's books for purchase of the bonds: 5) Record the receipt by Beta of the first semi-annual interest payment (note: you must calculate the amount of the bond discount amortization pertaining to the first semi-annual payment) 6. Assume that Beta Company sells its investment in Star bonds on November 1, 2015, at 99% plus accrued interest. Record the journal entry to accrue the interest revenue and discount amortization (4 months). Assume that the bond discount amortization at December 31 would have been $3,035. (Also, refer to the table attached)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Use the following data for problems 4 - 6:
Purchase of Bonds as Investment: Beta Company purchased $400,000 of 8 percent bonds of Star Corporation on January 1,
2011, at a discount, paying $359,118. The bonds mature January 1, 2016 and yield 10% interest payable each July 1 and January
1.
4) Record the Journal entry on Beta's books for purchase of the bonds:
5) Record the receipt by Beta of the first semi-annual interest payment (note: you must calculate the amount of the bond
discount amortization pertaining to the first semi-annual payment)
6. Assume that Beta Company sells its investment in Star bonds on November 1, 2015, at 99% plus accrued interest. Record the
journal entry to accrue the interest revenue and discount amortization (4 months). Assume that the bond discount amortization
at December 31 would have been $3,035. (Also, refer to the table attached)
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