Presented below is an amortization schedule related to Spangler Company's 5-year, $100,000 bond with a 7% interest
Question:
The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end.
Instructions
a. Prepare the journal entry to record the purchase of these bonds on December 31, 2016, assuming the bonds are classified as held-for-collection investments.
b. Prepare the journal entry(ies) related to the held-for-collection bonds for 2017.
c. Prepare the journal entry(ies) related to the held-for-collection bonds for 2019.
d. Prepare the journal entry(ies) to record the purchase of these bonds, assuming they are classified as trading.
e. Prepare the journal entry(ies) related to the bonds for 2017, assuming they are classified: (1) trading, and (2) held-for-collection and selling (HFCS).
f. Prepare the journal entry(ies) related to the trading bonds for 2019.
Step by Step Answer:
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield