On January 1, 2019, Roosevelt Company purchased 12% bonds having a maturity value of $600,000 for $637,907.40. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2019, and mature January 1, 2024, with interest received December 31 of each year. Assume that Roosevelt elected the fair value option for this held-for-collection investment. Instructions (a). Prepare any entries necessary at December 31, 2019, assuming the fair value of the bonds is $640,000. (b). Prepare any entries necessary at December 31, 2020, assuming the fair value of the bonds is $625,000.

On February 18, 2021, Union Corporation purchased 1,311 IBM bonds as a long-term investment at their face value for a total of $1,311,000. Union will hold the bonds indefinitely, and may sell them if their price increases sufficiently. On December 31, 2021, and December 31, 2022, the market value of the bonds was $1,273,000 and $1,330,000, respectively. Required: 2. & 3. Prepare the adjusting entry for December 31, 2021 and 2022. (If no entry is required for a

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On May 1, 2018, Green Corporation issued $1,100,000 of 12% bonds, dated January 1, 2018, for $1,074,000 plus accrued interest. The bonds mature on December 31, 2032, and pay interest semiannually on June 30 and December 31. Green's fiscal year ends on December 31 each year. Required: 1. Determine the amount of accrued interest that was included in the proceeds received from the bond sale. 2. Prepare the journal entry for the issuance of the bonds. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the amount of accrued interest that was included in the proceeds received from the bond sale. Accrued interest

On January 1, 2020, Riverbed Company purchased  12% bonds, having a maturity value of $ 284,000 for $ 305,531.40. The bonds provide the bondholders with a  10% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Riverbed Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2020   $ 303,400   2023   $ 293,200 2021   $ 292,200   2024   $ 284,000 2022   $ 291,200           (a)   Prepare the journal entry at the date of the bond purchase. (b)   Prepare the journal entries to record the interest revenue and recognition of fair value for 2020. (c)   Prepare the journal entry to record the recognition of fair value for 2021. (Round answers to 2 decimal places, e.g. 2,525.25. Credit account titles are automatically indented when…

On January 1, 2020, Coronado Company purchased 13% bonds, having a maturity value of $279,000 for $299,622.84. The bonds provide the bondholders with a 11% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Coronado Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2020   $297,600   2023   $289,600 2021   $288,500   2024   $279,000 2022   $287,600           (a)   Prepare the journal entry at the date of the bond purchase. (b)   Prepare the journal entries to record the interest revenue and recognition of fair value for 2020. (c)   Prepare the journal entry to record the recognition of fair value for 2021. (Round answers to 2 decimal places, e.g. 2,525.25. Credit account titles are automatically indented when amount is…

On January 1, 2026, 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, 2026, and mature January 1, 2036, with interest receivable June 30 and December 31 of each year. The securities are classified as available-for-sale. January 1, 2026 June 30, 2026 December 31, 2026 June 30, 2027 December 31, 2027 June 30, 2028 December 31, 2028 Schedule of Interest Revenue and Bond Amortization Amortization Cash Received (2.5%) Interest Revenue (3.5%) 3,750 3,750 3,750 3,750 3,750 3,750 4,844 4,882 4,922 4,963 5,005 5,049 The fair value of the bonds at December 31 of each year-end is as follows. 2026 145,000 2027 148,000 2028 152,000 1,094 1,132 1,172 1,213 1,255 1,299 Carrying Value 138,400 139,494 140,626 141,798 143,011 144,266 145,565 a) Prepare the journal entry at the date of the investment purchase. b) Prepare the journal entries to record the interest received on…

On January 1, 2020, Wildhorse Company purchased 6% bonds, having a maturity value of $550,000 for $475,253. The bonds provide the bondholders with a 8% yield. They are dated January 1, 2020, and mature January 1, 2027, with interest paid on June 30 and December 31 of each year. Wildhorse Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2020 $476,000 2023 2021 $471,000 2024 $466,000 2022 (a) Prepare the journal entry at the date of the bond purchase. (b) Prepare the journal entries to record the interest revenue and recognition of fair value for 2020. (c) Prepare the journal entry to record the recognition of fair value for 2021. (Round answers to 2 decimal places, eg. 2,525.25. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for…

On January 1, 2020, Sandhill Company purchased 12% bonds, having a maturity value of $325,000 for $349,639.81. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Sandhill Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2020   $347,400   2023   $334,900 2021   $333,800   2024   $325,000 2022   $332,800           (a)   Prepare the journal entry at the date of the bond purchase. (b)   Prepare the journal entries to record the interest revenue and recognition of fair value for 2020. (c)   Prepare the journal entry to record the recognition of fair value for 2021. (Round answers to 2 decimal places, e.g. 2,525.25. Credit account titles are automatically indented when amount is…

On January 1, 2020, Cheyenne Company purchased 5% bonds, having a maturity value of $570,000 for $488,989. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2020, and mature January 1, 2027, with interest paid on June 30 and December 31 of each year. Cheyenne Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2020   $490,000   2023   $510,000 2021   $485,000   2024   $530,000 2022   $480,000         (a)   Prepare the journal entry at the date of the bond purchase. (b)   Prepare the journal entries to record the interest revenue and recognition of fair value for 2020. (c)   Prepare the journal entry to record the recognition of fair value for 2021. (Round answers to 2 decimal places, e.g. 2,525.25. Credit account titles are automatically indented…