Horngren's Accounting, Student Value Edition (12th Edition)
Horngren's Accounting, Student Value Edition (12th Edition)
12th Edition
ISBN: 9780134487151
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 15, Problem P15.21BPGB

Accounting for debt investments
Learning Objective 2

  1. Dec. 31 Int. Rev. CR $14,000

Suppose Hale and Sons purchases $800,000 of 3.5% annual bonds of Tyson Way Corporation at face value on January 1, 2018. These bonds pay interest on June 30 and December 31 each year. They mature on December 31, 2022. Hale and Sons intends to hold the Tyson Way bond investment until maturity.

Requirements

  1. Journalize Hale and Sons's transactions related to the bonds for 2018.
  2. Journalize the entry required on the Tyson Way bonds maturity date. (Assume the last interest payment has already been recorded.)

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