Question: Refer to Exercise the Mile Down Co investment in

Refer to Exercise, the Mile Down & Co. investment in CocoCorp bonds.
In Exercise Mile Down & Co. owns vast amounts of corporate bonds. Suppose Mile Down buys $ 900,000 of CocoCorp bonds at face value on January 2, 2014. The CocoCorp bonds pay interest at the annual rate of 5% on June 30 and December 31 and mature on December 31, 2018. Mile Down intends to hold the investment until maturity.

1. How would the bond investment be classified on Mile Down’s December 31, 2014, balance sheet?
2. Journalize the following on Mile Down’s books:
a. Receipt of final interest payment on December 31, 2018
b. Disposal of the investment at maturity on December 31, 2018

Sale on SolutionInn
  • CreatedJanuary 16, 2015
  • Files Included
Post your question