Question: Assume the same information as in E17-3 except that the securities are classified as available-for-sale. The fair value of the bonds at December 31 of

Assume the same information as in E17-3 except that the securities are classified as available-for-sale. The fair value of the bonds at December 31 of each year end is as follows.

Assume the same information as in E17-3 except that the securities are

Instructions
(a) Prepare the journal entry at the date of the bond purchase.
(b) Prepare the journal entries to record the interest received and recognition of fair value for 2013.
(c) Prepare the journal entry to record the recognition of fair value for 2014.

Step by Step Solution

★★★★★

3.32 Rating (140 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a Journal entry at the date of bond purchase Debit Investments in Bonds AvailableforSale 500000 Credit Cash 500000 The journal entry at the date of bo... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Intermediate Accounting Questions!

Assume the same information as in Brief Exercise 5-41: Gordon's Grocers purchases bread from Buddy's Bread Company at $1.45 per loaf. Gordon's engaged in a customer service contract to purchase...

Assume the same information as in E1412. Minor Inc. sells 10% bonds having a maturity value of $3 million for $2,783,724. The bonds are dated January 1, 2011, and mature on January 1, 2016. Interest...

Assume the same information as in BE8-9. Young Inc.'s financial difficulties are over. On June 4, 2014, Perry Co. receives a payment in full of $5,500 from Young Inc. Record this transaction.

E 1 7 . 4 ( L 0 1 ) ( Entries for Available - for - Sale Securities ) Assume the same information as in E 1 7 . 3 except that the securities are classified as available - for - sale. The fair value...

Entries for Available-for-Sale Securities) Assume the same information as in E17-3 except that the securities are classified as available-for-sale. The fair value of the bonds at December 31 of each...

E17-4 (LO1) (Entries for Available-for-Sale Securities) Assume the same information as in E17-3 except that the securities are classified as available-for-sale. The fair value of the bonds at...

E17.3 (LO 1) (Entries for Held-to-Maturity Securities) On January 1, 2020, Hi and Lois Company purchased 12% bonds having a maturity value of $300,000 for $322,744.44. The bonds provide the...

Assume the same information as in E17.3 except that the securities are classified as available-for-sale. The fair value of the bonds at December 31 of each year-end is as follows. Instructions a....

E17-4 (Entries for Available-for-sale Securities) Assume the same information as in E17-3 except that the securities are classified as available-for-sale. The fair value of the bonds on December 31...

Discuss how the Decision Making Framework (DMF) can help an individual make better decisions. What if it is instituted organization-wide, what could be the impact?

The operators of annihilation and creation t are defined by: mw = 2h at = X -i 2h mw where w is a constant with dim ensions of sec1 Find the algebra of commutators of these operators.

ABC Co . issued 1 milion 6 percent annual coupon bonds that mature in 1 0 years. The face value is $ 1 , 0 0 0 per bond. What are the expected cash flows from one of these bonds? interest at the end...

=+this person have any prior connection to the university?

In this simulation, you are asked to compute various income amounts. Assume a tax rate of 30% and 100,000 shares of common stock outstanding during the year. Prepare responses to allparts. KWW...

Discuss the appropriate treatment in the income statement for the following items: (a) Loss on discontinued operations. (b) Non-controlling interest allocation.

Portfolio D is said to portfolio F if a rational investor would choose Portfolio D, regardless of the investor's risk preferences. mediate perforate subjugate None of the answers listed here

(Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Mixed Stream Beginning of year Cash Flow 0 $10,000 1 $8,000 2 $10,000 3...

Consider the following table for a period of six years: Year Returns Large- U.S. Company Treasury Bills Stocks - 15.59% 7.47% -26.74 8.08 37.41 6.05 24.11 5.97 - 7.52 5.54 6.75 7.91 ou WN- a-1....