On January 1, 2017, Novotna Company purchased $400,000 worth of 8% bonds of Aguirre Co. for $369,114.
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Instructions
(a) Prepare the journal entry to record the purchase of bonds on January 1. Assume that the bonds are classified as FV-OCI.
(b) Prepare the amortization schedule for the bonds.
(c) Prepare the journal entries to record the semi-annual interest on July 1, 2017, and December 31, 2017.
(d) Assuming the fair value of Aguirre bonds is $372,726 on December 31, 2018, prepare the necessary adjusting entry. (Assume that the fair value adjustment balance on January 1, 2018, is a debit of $3,375.)
(e) Prepare the journal entry to record the sale of the bonds on January 1, 2019.
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Related Book For
Intermediate Accounting
ISBN: 978-1119048534
11th Canadian edition Volume 1
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
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