FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:General Corporation purchased $938,000 of bonds with a coupon rate of 10% at face value on December 5, 2021. The market price of
the bond was $984,000 on December 31, 2021.
Required:
Prepare the appropriate journal entry on December 31, 2021, to properly value the bonds assuming the bonds are classified as: (If no
entry is required for a transaction/event, select "No journal entry required" in the first account field.) Ignore the journal entry for
coupon payment and interest recognition.
1. Trading securities.
2. Securities available-for-sale.
3. Held-to-maturity securities.
View transaction list
Journal entry worksheet
1
2
>
Record the unrealized holding gain or loss for trading securities.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit
1
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- 9. On August 20, 2025, Micco Co. decides to invest excess cash of $3,200 by purchasing Finch, Inc. bonds. At year-end, December 31, 2025, the market price of the bonds was $2,600. The investment is categorized as available-for-sale debt. Journalize the adjusting entry needed at December 31, 2025. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit Dec. 31, 2025arrow_forwardThe balance sheet at December 31, 2024, for Nevada Harvester Corporation includes the liabilities listed below: a. 7% bonds with a face amount of $46 million were issued for $46 million on October 31, 2015. The bonds mature on October 31, 2035. Bondholders have the option of calling (demanding payment on) the bonds on October 31, 2025, at a redemption price of $46 million. Market conditions are such that the call is not expected to be exercised. b. Management intended to refinance $6.6 million of its 14% notes that mature in May 2025. In early March, prior to the actual issuance of the 2024 financial statements, Nevada Harvester negotiated a line of credit with a commercial bank for up to $4.6 million any time during 2025. Any borrowings will mature two years from the date of borrowing. c. Noncallable 6% bonds with a face amount of $14.5 million were issued for $14.5 million on September 30, 2005. The bonds mature on September 30, 2025. Sufficient cash is expected to be available to…arrow_forwardPina Colada Corp. issues $2.80 million, 10-year, 6% bonds at 98, with interest payable each January 1. (a) Assuming instead that the above bonds sold for 102, prepare the journal entry to record the sale of these bonds on January 1. 2022. (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.) Date Account Titles and Explanation Jan, 1 Cash Bonds Payable Premium on Bonds Payable Debit Creditarrow_forward
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