-Avalladhu... A corporation purchases 200 $1,000 bonds on 5/1, Year 6, at 103.922 [percent of face...

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-Avalladhu... A corporation purchases 200 $1,000 bonds on 5/1, Year 6, at 103.922 [percent of face value]. (plus accrued interest) semiannual interest is paid on 6/30 and 12/31 each year. The stated rate is 8% and the yield 7%. The bond matures on 12/31, Year 10. It is accounted for as an AFS investment. Date 5/1/Yr6 Cash paid to acquire the bond: Bond price x $1,000 x Accrued interest: (S Total cash paid to acquire the bond Semi-annual interest payment: (S %x_/12)-S Amortization schedule: Prepare the following amortization schedule for the dates indicated, rounded to nearest dollar. 6/30/Yr6 12/31/Yr 6 6/30/Yr 7 12/31/Yr 7 Market values: 12/31/Yr 6 12/31/Yr 7 Interest payment ( IC UNREAL. G/L- OCI 5/1/Yr6 12/31/Vr6 12/31/Yr 7 Interest income 105, 105 % X the face value 107 x 7% x_/_)- x 7%x%)- x 7%x%)- x 7%x%)- 0 Record journal entries on the next page. _/12) = + = 5/1/Nr6 12/31/Yr6 Amortization of premium FAIR VALUE ADJUSTMENT 0 12/31/7 S Carrying value of bend investment Fair value Journal Entries: 5/1/Yr 6 6/30/Yr 6 12/31/Yr 6 6/30/Yr 7 12/31/Yr 7 Check figures: 12/31, Year 7, carrying value at amortized cost is $205,322. The FVA at 12/31, Year 7, is $8,678. -Avalladhu... A corporation purchases 200 $1,000 bonds on 5/1, Year 6, at 103.922 [percent of face value]. (plus accrued interest) semiannual interest is paid on 6/30 and 12/31 each year. The stated rate is 8% and the yield 7%. The bond matures on 12/31, Year 10. It is accounted for as an AFS investment. Date 5/1/Yr6 Cash paid to acquire the bond: Bond price x $1,000 x Accrued interest: (S Total cash paid to acquire the bond Semi-annual interest payment: (S %x_/12)-S Amortization schedule: Prepare the following amortization schedule for the dates indicated, rounded to nearest dollar. 6/30/Yr6 12/31/Yr 6 6/30/Yr 7 12/31/Yr 7 Market values: 12/31/Yr 6 12/31/Yr 7 Interest payment ( IC UNREAL. G/L- OCI 5/1/Yr6 12/31/Vr6 12/31/Yr 7 Interest income 105, 105 % X the face value 107 x 7% x_/_)- x 7%x%)- x 7%x%)- x 7%x%)- 0 Record journal entries on the next page. _/12) = + = 5/1/Nr6 12/31/Yr6 Amortization of premium FAIR VALUE ADJUSTMENT 0 12/31/7 S Carrying value of bend investment Fair value Journal Entries: 5/1/Yr 6 6/30/Yr 6 12/31/Yr 6 6/30/Yr 7 12/31/Yr 7 Check figures: 12/31, Year 7, carrying value at amortized cost is $205,322. The FVA at 12/31, Year 7, is $8,678.

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SOLUTION To prepare the amortization schedule and record the journal entries well go through the given information step by step Lets start by calculat... View the full answer