A3 Prepare the journal entries to record the recognition of fair value for 2023 and assuming the investment is sold for $260,000 onDecember 31, 2023, reclassifying any accumulated holding gains or losses to net income. (Credit account titles are automaticallyindented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O forthe amounts. List all debit entries before credit entries. Round answers to 2 decimal places, e.g. 52.75)Date Account Titles and ExplanationDec. 31Dec. 31Dec. 31Bond Investment at Amortized CostCash(To adjust to fair value at date of disposal)(To record disposal)Unrealized Gain or Loss(To reclassify holding loss)DebitCredit11 On January 1, 2022, Culver and Lois Company purchased 12% bonds having a maturity value of $252,000 for $271,105.56. The bondsprovide the bondholders with a 10% yield. They are dated January 1, 2022, and mature on January 1, 2027, with interest receivableon December 31 of each year. Culver and Lois Company uses the effective interest method to allocate unamortized discount orpremium. The bonds are carried at FV-OCI. The fair value of the bonds at December 31 of each year-end is as follows:2022 $269,000$260,0002023Your answer is correct.Prepare the journal entries to record the interest received and recognition of fair value for 2022. (Credit account tities areautomatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titlesand enter 0 for the amounts. List all debit entries before credit entries. Round answers to 2 decimal places, eg. 52.75.)Date Account Titles and ExplanationDec. 31Dec. 31CashFV-OCI Investmentsinterest income(To record collection of interest)FV-OCI InvestmentsUnrealized Gain or Loss-OCI(To record fair value adjustment)Debit30,2401.023.88Credit3,129.4427.110.561,023.88

The bonds are issued or purchased either at discount or at a premium. The bond amortization table is…

Prepare the journal entries to record the recognition of fair value for 2023 and assuming the investment is sold for $260,000 on December 31, 2023, reclassifying any accumulated holding gains or losses to net income. (Credit account titles are automatically indented when the 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 List all debit entries before credit entries. Round answers to 2 decimal places, eg. 52.75)

Prepare the journal entries to record the recognition of fair value for 2023 and assuming the investment is sold for $260,000 on December 31, 2023, reclassifying any accumulated holding gains or losses to net income. (Credit account titles are automatically indented when the 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 List all debit entries before credit entries. Round answers to 2 decimal places, eg. 52.75)

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

ChapterMB: Model-building Problems

Section: Chapter Questions

Problem 13M

See similar textbooks

Similar questions

On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018, and received $540,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. Dec. 31, 2018: entry to record payment of interest to bondholders C. Dec. 31, 2018: entry to record amortization of premium
Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $540,000. Interest is payable annually. The premium is amortized using the straightline method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of premium D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of premium
Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?
Dixon 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. A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of discount D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of discount
Edward 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 semiannually. The discount is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. Dec. 31, 2018: entry to record payment of interest to bondholders C. Dec. 31, 2018: entry to record amortization of discount
Bats Corporation issued 800,000 of 12% face value bonds for 851,705.70. The bonds were dated and issued on April 1, 2019, are due March 31, 2023, and pay interest semiannually on September 30 and March 31. Bats sold the bonds to yield 10%. Required: 1. Prepare a bond interest expense and premium amortization schedule using the straight-line method. 2. Prepare a bond interest expense and premium amortization schedule using the effective interest method. 3. Prepare any adjusting entries for the end of the fiscal year, December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. Assume the company retires the bonds on June 30, 2020, at 103 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight-line method of amortization b. effective interest method of amortization