I\'m looking for the answer to problem E17-4B Instructions Prepare the journal e

Question

I'm looking for the answer to problem E17-4B Instructions Prepare the journal entry at the date of the bond purchase. Prepare the journal entries to record the interest received and recognition of fair value for 2014 Prepare the journal entry to record the recognition of fair value for 2015. On January 1,2014, Hummer Company purchased 5% bonds, having a maturity value of $500,000, for $428,938. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2014, and mature January' 1, 2024, with interest receivable June 30 and December 31 of each year. Hummer Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category. Instructions Prepare the journal entry at the date of the bond purchase. Prepare the first 3 years of a bond amortization schedule. Prepare the journal entries to record the interest received arid the amortization for 2014. Assume the same information as in E17-3B except that the securities are classified as available-for-sale. The fair value of the bonds at December 31 of each year- end is as follows. Instructions Prepare the journal entry at the date of the bond purchase. Prepare the journal entries to record the interest received and recognition of fair value for 2014 Prepare the journal entry to record the recognition of fair value for 2015.

Explanation / Answer

Bond amortization schedule

cash

received

3.5%Interest

revenue

Bond discount

amortised

carrying value

of bonds

Journal entries

Avlaible for sale securities

(434052-430000)

Avlaible for sale securities

(439530-425000)-4052

Date

cash

received

3.5%Interest

revenue

Bond discount

amortised

carrying value

of bonds

Jan1,2014 428938 June30,2014 12500 15013 2513 431451 Dec31,2015 12500 15101 2601 434052 June30,2016 12500 15192 2692 436744 Dec31,2015 12500 15286 2786 439530

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

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