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On January 1, 2024, Morrison Inc., a public company, purchased $600,000 of Pearl Corporation's five-year, 4% bonds for $627,660 when the market interest rate was 3%. Interest is received semi-annually on July 1 and January 1. Morrison's year end is December 31. Morrison intends to hold Pearl's bonds until January 1, 2029, the date the bonds mature. The bonds' fair value on December 31, 2024, was $620,000. Instructions Record the purchase of the bonds on January 1, 2024. Prepare the entry to record the receipt of interest on July 1, 2024. Prepare the adjusting entry required at December 31, 2024. Show the financial presentation of the bonds for Morrison on December 31, 2024. Prepare the entry to record the receipt of interest on January 1, 2025. Prepare the entry to record the receipt on maturity of the bonds on January 1, 2029. Assume the entry to record the last interest payment has been recorded.

On January 1, 2024, Morrison Inc., a public company, purchased $600,000 of Pearl Corporation's five-year, 4% bonds for $627,660 when the market interest rate was 3%. Interest is received semi-annually on July 1 and January 1. Morrison's year end is December 31. Morrison intends to hold Pearl's bonds until January 1, 2029, the date the bonds mature. The bonds' fair value on December 31, 2024, was $620,000. Instructions Record the purchase of the bonds on January 1, 2024. Prepare the entry to record the receipt of interest on July 1, 2024. Prepare the adjusting entry required at December 31, 2024. Show the financial presentation of the bonds for Morrison on December 31, 2024. Prepare the entry to record the receipt of interest on January 1, 2025. Prepare the entry to record the receipt on maturity of the bonds on January 1, 2029. Assume the entry to record the last interest payment has been recorded.

Intermediate Accounting: Reporting And Analysis
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
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 16E
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On January 1, 2024, Morrison Inc., a public company, purchased $600,000 of Pearl Corporation's five-year, 4% bonds for $627,660 when the market interest rate was 3%. Interest is received semi-annually on July 1 and January 1. Morrison's year end is December 31. Morrison intends to hold Pearl's bonds until January 1, 2029, the date the bonds mature. The bonds' fair value on December 31, 2024, was $620,000. Instructions Record the purchase of the bonds on January 1, 2024. Prepare the entry to record the receipt of interest on July 1, 2024. Prepare the adjusting entry required at December 31, 2024. Show the financial presentation of the bonds for Morrison on December 31, 2024. Prepare the entry to record the receipt of interest on January 1, 2025. Prepare the entry to record the receipt on maturity of the bonds on January 1, 2029. Assume the entry to record the last interest payment has been recorded.
Transcribed Image Text:On January 1, 2024, Morrison Inc., a public company, purchased $600,000 of Pearl Corporation's five-year, 4% bonds for $627,660 when the market interest rate was 3%. Interest is received semi-annually on July 1 and January 1. Morrison's year end is December 31. Morrison intends to hold Pearl's bonds until January 1, 2029, the date the bonds mature. The bonds' fair value on December 31, 2024, was $620,000. Instructions Record the purchase of the bonds on January 1, 2024. Prepare the entry to record the receipt of interest on July 1, 2024. Prepare the adjusting entry required at December 31, 2024. Show the financial presentation of the bonds for Morrison on December 31, 2024. Prepare the entry to record the receipt of interest on January 1, 2025. Prepare the entry to record the receipt on maturity of the bonds on January 1, 2029. Assume the entry to record the last interest payment has been recorded.
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