Presented below is an amortization schedule related to Flint Company's 5-year, $150,000 bond with a 7% interest rate and a 4% yield, purchased on December 31, 2023, for $170,034. Date Cash Received Interest Revenue Bond Premium Carrying Amount Amortization of Bonds 12/31/23 $170,034 12/31/24 $10,500 $6,801 $3,699 166,335 12/31/25 10,500 6,653 3,847 162,488 12/31/26 10,500 6,500 4,000 158,488 12/31/27 10,500 6,340 4,160 154,328 12/31/28 10,500 6,172 4,328 150,000 The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end. 12/31/24 12/31/25 12/31/26 12/31/27 12/31/28 Amortized cost $166,335 $162,488 $158,488 $154,328 $150,000 Fair value 165,800 164,700 160,400 155,400 150,000 (a) Prepare the journal entry to record the purchase of these bonds on December 31, 2023, assuming the bonds are classified as held-to-maturity securities. (b) Prepare the journal entry related to the held-to-maturity bonds for 2024. (c) Prepare the journal entry related to the held-to-maturity bonds for 2026. (d) Prepare the journal entry to record the purchase of these bonds, assuming they are classified as available-for-sale. (e) Prepare the journal entries related to the available-for-sale bonds for 2024. (f) Prepare the journal entries related to the available-for-sale bonds for 2026.
Presented below is an amortization schedule related to Flint Company's 5-year, $150,000 bond with a 7% interest rate and a 4% yield, purchased on December 31, 2023, for $170,034. Date Cash Received Interest Revenue Bond Premium Carrying Amount Amortization of Bonds 12/31/23 $170,034 12/31/24 $10,500 $6,801 $3,699 166,335 12/31/25 10,500 6,653 3,847 162,488 12/31/26 10,500 6,500 4,000 158,488 12/31/27 10,500 6,340 4,160 154,328 12/31/28 10,500 6,172 4,328 150,000 The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end. 12/31/24 12/31/25 12/31/26 12/31/27 12/31/28 Amortized cost $166,335 $162,488 $158,488 $154,328 $150,000 Fair value 165,800 164,700 160,400 155,400 150,000 (a) Prepare the journal entry to record the purchase of these bonds on December 31, 2023, assuming the bonds are classified as held-to-maturity securities. (b) Prepare the journal entry related to the held-to-maturity bonds for 2024. (c) Prepare the journal entry related to the held-to-maturity bonds for 2026. (d) Prepare the journal entry to record the purchase of these bonds, assuming they are classified as available-for-sale. (e) Prepare the journal entries related to the available-for-sale bonds for 2024. (f) Prepare the journal entries related to the available-for-sale bonds for 2026.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 1RE
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