Date Cash Received Interest Revenue Bond Premium Amortization Carrying Amount of

Question

Date

Cash
Received

Interest
Revenue

Bond Premium
Amortization

Carrying Amount
of Bonds

12/31/13

12/31/14

12/31/15

12/31/16

12/31/17

No.

Date

Account Titles and Explanation

Debit

Credit

(a)

(b)

(c)

(d)

(e)

(To record interest revenue.)

(To record adjustment.)

(f)

(To record interest revenue.)

(To record adjustment.)

SHOW LIST OF ACCOUNTS

LINK TO TEXT

SAVE FOR LATER

SUBMIT ANSWER

Presented below is an amortization schedule related to Spangler Company’s 5-year, $128,100 bond with a 8% interest rate and a 6% yield, purchased on December 31, 2012, for $138,892.

Date

Cash
Received

Interest
Revenue

Bond Premium
Amortization

Carrying Amount
of Bonds

12/31/12 $138,892 12/31/13 $10,248 $8,334 $1,914 136,978 12/31/14 10,248 8,219 2,029 134,949 12/31/15 10,248 8,097 2,151 132,798 12/31/16 10,248 7,968 2,280 130,518 12/31/17 10,248 7,831 2,418 128,100
The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end.

12/31/13

12/31/14

12/31/15

12/31/16

12/31/17

Amortized cost $136,978 $134,949 $132,798 $130,518 $128,100 Fair value $136,434 $137,008 $134,734 $131,538 $128,100 (a) Prepare the journal entry to record the purchase of these bonds on December 31, 2012, assuming the bonds are classified as held-to-maturity securities. (b) Prepare the journal entry related to the held-to-maturity bonds for 2013. (c) Prepare the journal entry related to the held-to-maturity bonds for 2015. (d) Prepare the journal entry to record the purchase of these bonds, assuming they are classified as available-for-sale. (e) Prepare the journal entries related to the available-for-sale bonds for 2013. (f) Prepare the journal entries related to the available-for-sale bonds for 2015.
(Round answers to 0 decimal places, e.g. 2,500. 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 titles and enter 0 for the amounts.)

No.

Date

Account Titles and Explanation

Debit

Credit

(a)

Dec. 31, 2012

(b)

Dec. 31, 2013

(c)

Dec. 31, 2015

(d)

Dec. 31, 2012

(e)

Dec. 31, 2013

(To record interest revenue.)

Dec. 31, 2013

(To record adjustment.)

(f)

Dec. 31, 2015

(To record interest revenue.)

Dec. 31, 2015

(To record adjustment.)

SHOW LIST OF ACCOUNTS

LINK TO TEXT

Question Attempts: 0 of 5 used

SAVE FOR LATER

SUBMIT ANSWER

Copyright © 2000-2016 by John Wiley & Sons, Inc. or related companies. All rights reserved.

Explanation / Answer

No. Date Particulars Debit Credit a Dec. 31, 2012 Dr. Investment in held-to-maturity securitiesA/c $138,892 Cr. Cash A/c $138,892 b. Dec. 31, 2013 Dr. Cash A/c $10,248 Cr. Interest Revenue A/c $8,334 Cr.Investment in held-to-maturity securitiesA/c $1,914 c. 12/31/15 Dr. Cash A/c $10,248 Cr. Interest Revenue A/c 8,097 Cr.Investment in held-to-maturity securitiesA/c 2,151 d. Dec. 31, 2012 Dr. Investment Available for Sale A/c $138,892 Cr. Cash A/c $138,892 e Dec. 31, 2013 Dr. Cash A/c $10,248 Cr. Interest Revenue A/c $8,334 Cr. Investment Available for Sale A/c $1,914 Dec. 31, 2013 Dr.Unrealized Holding gain/ loss A/c $544 Cr. Fairvalue A/c $544 f Dec. 31, 2015 Dr. Cash A/c 10,248 Cr. Interest Revenue A/c 8,097 Cr. Investment Available for Sale A/c 2,151 Dec. 31, 2015 Dr. Fairvalue A/c $1,936 Cr.Unrealized Holding gain/ loss A/c $1,936

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.