Mercer Investments acquired $120,000 Jericho Corp., 6% bonds at par value as a held- to-maturity investment on
Question:
Mercer Investments acquired $120,000 Jericho Corp., 6% bonds at par value as a held- to-maturity investment on September 1, 2015. The bonds pay interest on September 1 and March 1. On March 1, 2016, Mercer sold $40,000 par value Jericho Corp. bonds at 102, after receipt of the interest.
Journalize the entries to record the following:
a. The initial acquisition of the Jericho Corp. bonds on September 1, 2015.
b. The adjusting entry for 121 days of accrued interest earned on the Jericho Corp. bonds on December 31, 2015.
c. The receipt of semiannual interest on March 1, 2016.
d. The sale of $40,000 Jericho Corp. bonds on March 1, 2016, at 102.
Par ValuePar value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
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Accounting Volume 2
ISBN: 978-0176509743
2nd Canadian edition
Authors: James Reeve, Jonathan Duchac, Sheila Elworthy, Carl S. Warren