Windsor Company purchased, on January 1, 2020, as an available-for-sale security, $86,000 of the 7%, 5-year bonds of Chester Corporation for $79,310, which provides an 9% return. Prepare Windsor's journal entries for (a) the purchase of the investment, (b) the receipt of annual interest and discount amortiza and (c) the year-end fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) The bonds have a year fair value of $81,700. Assume effective-interest amortization is used. (Round answers to O decimal places, e.g. 1,225. Credit account are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account title enter O for the amounts.) No. Account Titles and Explanation Debit Credit
Windsor Company purchased, on January 1, 2020, as an available-for-sale security, $86,000 of the 7%, 5-year bonds of Chester Corporation for $79,310, which provides an 9% return. Prepare Windsor's journal entries for (a) the purchase of the investment, (b) the receipt of annual interest and discount amortiza and (c) the year-end fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) The bonds have a year fair value of $81,700. Assume effective-interest amortization is used. (Round answers to O decimal places, e.g. 1,225. Credit account are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account title enter O for the amounts.) No. Account Titles and Explanation Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject: acc
Transcribed Image Text:Windsor Company purchased, on January 1, 2020, as an available-for-sale security, $86,000 of the 7%, 5-year bonds of Chester
Corporation for $79,310, which provides an 9% return.
Prepare Windsor's journal entries for (a) the purchase of the investment, (b) the receipt of annual interest and discount amortization,
and (c) the year-end fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) The bonds have a year-end
fair value of $81,700. Assume effective-interest amortization is used. (Round answers to O decimal places, e.g. 1,225. Credit account titles
are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and
enter o for the amounts.)
No. Account Titles and Explanation
(a)
(b)
(c)
Debit
Credit
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