Your answer is partially correct. Try again. Skysong Corporation purchased, as a

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Your answer is partially correct. Try again. Skysong Corporation purchased, as a held-to-maturity investment, $58,000 of the 8%, 6-year bonds of Harrison, Inc. for S53, 773, which provides a 6% return. The bonds pay interest semiannually. Prepare Skysong's journal entries for (a) the purchase of the investment, and (b) the receipt of semiannual interest and premium amortization. Assume effective- interest amortization is used. (Round answers to O decimai places, e.g. 5,125.Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account tities and enter O for the amounts.) No. Account Titles and Explanation Debit Credit (a) held to maturity securities 63773.00 cash 63773.00 held to maturity securities 406.81 Interest Revenue 1913.19

Explanation / Answer

Solution:

Journal Entries - Skysong Corporation Event Particulars Debit Credit a Investment in Bond - Held to Maturity Dr $63,773.00          To Cash $63,773.00 (To record purchase of bond classified under HTM) b Cash Dr $2,320.00          To Interest revenue $1,913.00          To Investment in Bond - Held to Maturity $407.00 (To record interest revenue and premium amortization)

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