Universal Foods issued 12% bonds, dated January 1, with a face amount of $155 million on January 1, 2021 to Wang Communications. The bonds mature on December 31, 2038 (15 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. Required: 1. to 3. Prepare the journal entries to record the purchase of the bonds by Wang Communications on January 1, 2024, interest revenue on June 30, 2024 and interest revenue on December 31, 2031.

Universal Foods issued 12% bonds, dated January 1, with a face amount of $155 million on January 1, 2021 to Wang Communications. The bonds mature on December 31, 2038 (15 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. Required: 1. to 3. Prepare the journal entries to record the purchase of the bonds by Wang Communications on January 1, 2024, interest revenue on June 30, 2024 and interest revenue on December 31, 2031.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 1RE

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