Harvey Corp. purchases 10% bonds with face values of $200,000 on January 1, 2017. The bonds are
Question:
Harvey Corp. purchases 10% bonds with face values of $200,000 on January 1, 2017. The bonds are dated January 1, 2017, and will mature on January 1, 2022. The bonds will pay interest on December 31 of each year. Harvey pays $215,970 for the bonds to yield 8% (market rate). Harvey accounts for the bonds at FV-OCI. Harvey’s fiscal year-end is December 31. Fair values of the bonds on December 31, 2017, and 2018 respectively are:
2017 2018
Prepare a table to show interest income, interest received and premium or discount amortization for the bonds for each of the five years.
$214,040 |
$207,280
|
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella