On October 1, 2019, Hill-Nielsen purchased at par $170,000, 4%, bonds of Community Communications Company. The bonds
Question:
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.
Step by Step Answer:
Financial Accounting
ISBN: 978-1259964947
10th edition
Authors: Robert Libby, Patricia Libby, Frank Hodge