I only need part B Part A On January 1, 2023, Baker Company purchased, as an investment, 5% bonds, having a maturity value of $150,000, for $138,400. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2023, and mature January 1, 2033, with interest receivable June 30 and December 31 of each year. Baker Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category. a) Prepare the schedule of interest revenue and bond amortization from January 1, 2023 through December 31, 2025. January 1, 2023 June 30, 2023 December 31, 2023 June 30, 2024 December 31, 2024 June 30, 2025 December 31, 2025 b) Prepare the journal entry at the date of the bond purchase. c) Prepare the journal entry to record the interest received and the amortization for June 30, 2023. d) Prepare the journal entry to record the interest received and the amortization for December 31, 2025. Part B Assume the same information as in Part A except that the securities are classified as available-for-sale. The fair value of the bonds at December 31 of each year-end is as follows. 2023 145,000 2024 148,000 2025 152,000 a) Prepare the journal entry at the date of the investment purchase. b) Prepare the journal entries to record the interest received on December 31, 2023 and recognition of fair value at December 31, 2023. c) Prepare the journal entry to record the recognition of fair value at December 31, 2024. d) Prepare the journal entry to record the recognition of fair value at December 31, 2025. I only need part B

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 5PA: Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July...

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I only need part B

Part A
On January 1, 2023, Baker Company purchased, as an investment, 5% bonds, having a maturity value of
$150,000, for $138,400. The bonds provide the bondholders with a 7% yield. They are dated January 1,
2023, and mature January 1, 2033, with interest receivable June 30 and December 31 of each year. Baker
Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are
classified in the held-to-maturity category.
a) Prepare the schedule of interest revenue and bond amortization from January 1, 2023 through December
31, 2025.
January 1, 2023
June 30, 2023
December 31, 2023
June 30, 2024
December 31, 2024
June 30, 2025
December 31, 2025
b) Prepare the journal entry at the date of the bond purchase.
c) Prepare the journal entry to record the interest received and the amortization for June 30, 2023.
d) Prepare the journal entry to record the interest received and the amortization for December 31, 2025.

Part B

Assume the same information as in Part A except that the securities are classified as available-for-sale. The
fair value of the bonds at December 31 of each year-end is as follows.
2023 145,000
2024 148,000
2025 152,000
a) Prepare the journal entry at the date of the investment purchase.
b) Prepare the journal entries to record the interest received on December 31, 2023 and recognition of fair
value at December 31, 2023.
c) Prepare the journal entry to record the recognition of fair value at December 31, 2024.
d) Prepare the journal entry to record the recognition of fair value at December 31, 2025.

I only need part B

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