On Jan 1, 2018 your company purchases a 5 year $100,000 bond with a stated rate...

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On Jan 1, 2018 your company purchases a 5 year $100,000 bond with a stated rate of 5% and a yield of 3% for $109,160. Interest is paid annually on 12/31. You determine that the investment should be treated as an Available for Sale Security. Fair Value of the bond: 12/31/2018-$107,400; 12/31/2019-$106,000; 12/31/2020-$104,000 a) Record purchase on January 1, 2018 b) Create a Bond Amortization schedule through 12/31/2020 c) Record journal entry for interest revenue on December 31, 2019 d) Determine the fair value adjustment at the end of 12/31/2018, 2019, and 2020 What is the journal entry needed if you sold this bond at Jan 1, 2021 for $104,000? On Jan 1, 2018 your company purchases a 5 year $100,000 bond with a stated rate of 5% and a yield of 3% for $109,160. Interest is paid annually on 12/31. You determine that the investment should be treated as an Available for Sale Security. Fair Value of the bond: 12/31/2018-$107,400; 12/31/2019-$106,000; 12/31/2020-$104,000 a) Record purchase on January 1, 2018 b) Create a Bond Amortization schedule through 12/31/2020 c) Record journal entry for interest revenue on December 31, 2019 d) Determine the fair value adjustment at the end of 12/31/2018, 2019, and 2020 What is the journal entry needed if you sold this bond at Jan 1, 2021 for $104,000?

Answer rating: 100% (QA)

a Journal entry on January 1 2018 Bond Purchase Available for Sale Securities 109160 Cash 109160 b B... View the full answer