Presented below is an amortization schedule related to Spangler Company’s 5-year, $100,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2012, for $108,660.

The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end.

Instructions

(a) Prepare the journal entry to record the purchase of these bonds on December 31, 2012, assuming the bonds are classified as held-for-collection investments.

(b) Prepare the journal entry(ies) related to the held-for-collection bonds for 2013.

(c) Prepare the journal entry(ies) related to the held-for-collection bonds for 2015.

(d) Prepare the journal entry(ies) to record the purchase of these bonds, assuming they are classified as trading.

(e) Prepare the journal entry(ies) related to the trading bonds for 2013.

(f) Prepare the journal entry(ies) related to the trading bonds for 2015.

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Date 12/31/12 Cash Received Interest Revenue Bond Premium Carrying Amount Amortization of Bonds $108,660 12/31/13 $7,000 $5,433 $1,567 107,093 12/31/14 7,000 5,354 1,646 105,447 12/31/15 7,000 5,272 1,728 103,719 12/31/16 7,000 5,186 1,814 101,905 12/31/17 7,000 5,095 1,905 100,000