E17.6 (LO 1) (HFCS Debt Securities Entries and Financial Statement Presentation) At December 31, 2022, the held-for- collection and selling debt portfolio for Steffi Graf SA is as follows. Security A B C Total Amortized Cost Fair Value €17,500 €15,000 12,500 14,000 23,000 25,500 €53,000 €54,500 Previous fair value adjustment balance-Dr. Fair value adjustment-Dr. Unrealized Gain (Loss) (€2,500) 1,500 2,500 1,500 400 €1,100 On January 20, 2023, Steffi Graf SA sold security A for €15,100. Instructions a. Prepare the adjusting entry at December 31, 2022, to report the portfolio at fair value. b. Show the statement of financial position presentation of the investment-related accounts at December 31, 2022. (Ignore notes presentation.) c. Prepare the journal entry for the 2023 sale of security A.

PB5.  LO 13.3Dixon Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $480,000. Interest is payable annually. The discount is amortized using the straight-line method. Prepare journal entries for the following transactions. July 1, 2018: entry to record issuing the bonds June 30, 2019: entry to record payment of interest to bondholders June 30, 2019: entry to record amortization of discount June 30, 2020: entry to record payment of interest to bondholders June 30, 2020: entry to record amortization of discount

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E9.14 (LO) (Debt Investment Entries - FV - OCI) On July 1, 2023, Miron Aggregates Ltd. purchased 6% bonds with a maturity value of $100,000 for $103,585. The bonds provide the bondholders with a 5% yield. The bonds mature four years later, on July 1, 2027, with interest receivable June 30 and December 31 of each year. Miron uses the effective interest method to allocate unamortized discount or premium. The bonds are accounted for using the FV - OCI model with recycling. Miron has a calendar year end. The fair value of the bonds at December 31, 2023 and 2024, was $103,400 and $102, 200, respectively. Assume fair value adjustments are recorded at year end only. Immediately after collecting interest on December 31, 2024, the bonds were sold for $102, 200.

(5 points) Which of the following is true of the straight-line method for amortizing premiums and discounts on long-term debt? (LE 3) O The method can be used by any company for any debt. O The journal entries are the same for every payment. O The method is preferred by FASB. O The premium or discount amortized away is the plug figure in the journal entry. EE

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E14.7 (LO 1) Groupwork (Determine Proper Amounts in Account Balances) Presented below are three independent situations. Instructions a. McEntire Co. sold $2,500,000 of 11%, 10-year bonds at 106.231 to yield 10% on January 1, 2022. The bonds were dated January 1, 2022, and pay interest on July 1 and January 1. Determine the amount of interest expense to be reported on July 1, 2022, and December 31, 2022. b. Cheriel Inc. issued $600,00o of 9%, 10-year bonds on June 30, 2022, for $562,500. This price provided a yield of 10% on the bonds. Interest is payable semiannually on December 31 and June 30. Determine the amount of interest expense to record if financial statements are issued on October 31, 2022. c. On October 1, 2022, Chinook Company sold 12% bonds having a maturity value of $800,000 for $853,382 plus accrued interest, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2022, and mature January 1, 2027, with interest payable December 31 of each year.…

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