On October 1, 2019, Hill-Nielsen purchased at par $170,000, 4%, bonds of Community Communications Company. The bonds pay interest quarterly on March 31, June 30, September 30, and December 31. Hill-Nielson Corporation?s year ends on December 31. The following information applies to the fair value of Community Communications? bonds:

Hill-Nielson sold the bonds on March 17, 2022, for $164,000.

Required:

Prepare the entry to record interest received on December 31, 2019. Assuming that Hill-Nielson purchased the bonds as trading securities, prepare journal entries at the end of each year and on the date of sale. Ignore interest.

Assuming that Hill-Nielson purchased the bonds as available-for-sale securities, prepare journal entries at the end of each year and on the date of sale. Ignore interest.

Transcribed Image Text:

Bond Price 12/31/2019 $173,000 12/31/2019 12/31/2020 168,000 12/31/2021 165,000