The Bradford Company issued 10% bonds, dated January 1, with a face amount of $80 million on January 1, 2024 to Saxton-Bose Corporation. • The bonds mature on December 31, 2033 (10 years). • For bonds of similar risk and maturity, the market yield is 12%. • Interest is paid semiannually on June 30 and December 31. Required: 1. to 3. Prepare the journal entries to record the purchase of the bonds by Saxton-Bose on January 1, 2024, interest revenue on June 30, 2024 and interest revenue on December 31, 2024 (at the effective rate). Note: Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) No 1 2 3 Date January 01, 2024 Cash June 30, 2024 General Journal Discount on investment in bonds Bonds payable Cash Discount on investment in bonds Interest revenue December 31, 20: Cash Discount on investment in bonds Interest revenue Debit 70,824,084 X 9,175,916 2,800,000 X 161,973 2,800,000 X 170,072 Credit 80,000,000 2,961,973 2,970,072
The Bradford Company issued 10% bonds, dated January 1, with a face amount of $80 million on January 1, 2024 to Saxton-Bose Corporation. • The bonds mature on December 31, 2033 (10 years). • For bonds of similar risk and maturity, the market yield is 12%. • Interest is paid semiannually on June 30 and December 31. Required: 1. to 3. Prepare the journal entries to record the purchase of the bonds by Saxton-Bose on January 1, 2024, interest revenue on June 30, 2024 and interest revenue on December 31, 2024 (at the effective rate). Note: Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) No 1 2 3 Date January 01, 2024 Cash June 30, 2024 General Journal Discount on investment in bonds Bonds payable Cash Discount on investment in bonds Interest revenue December 31, 20: Cash Discount on investment in bonds Interest revenue Debit 70,824,084 X 9,175,916 2,800,000 X 161,973 2,800,000 X 170,072 Credit 80,000,000 2,961,973 2,970,072
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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please answer do not image format
Transcribed Image Text:The Bradford Company issued 10% bonds, dated January 1, with a face amount of $80 million on January 1, 2024 to Saxton-Bose
Corporation.
Required:
1. to 3. Prepare the journal entries to record the purchase of the bonds by Saxton-Bose on January 1, 2024, interest revenue on June
30, 2024 and interest revenue on December 31, 2024 (at the effective rate).
Note: Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the
first account field. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of
$1)
. The bonds mature on December 31, 2033 (10 years).
• For bonds of similar risk and maturity, the market yield is 12%.
• Interest is paid semiannually on June 30 and December 31.
No
1
2
3
Date
January 01, 2024 Cash
June 30, 2024
General Journal
Discount on investment in bonds
Bonds payable
Cash
Discount on investment in bonds
Interest revenue
December 31, 202 Cash
Discount on investment in bonds
Interest revenue
X
✓
✓
✓
› ››
Debit
70,824,084 X
9,175,916
2,800,000 X
161,973 X
2,800,000 X
170,072 X
Credit
80,000,000 X
2,961,973 x
2,970,072
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