Northstar Corp. purchased $70,000 of Vision Consulting Inc. 7% bonds at a price of 98.5 on...

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Northstar Corp. purchased $70,000 of Vision Consulting Inc. 7% bonds at a price of 98.5 on January 1, 2014. The bonds mature on December 31, 2016. Northstar Corp. uses the straight-line method of amortizing any premium or discount on investments in bonds. At December 31, 2014 and 2015, the market value of the bonds is quoted at 98 and 99, respectively. Interest is paid out each year on December 31. Northstar Corp. follows ASPE and management accounts for this investment at amortized cost. Show the entry to record the purchase of the bonds, the entry to be made on December 31, 2014, and the entry to be made on December 31, 2015. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan). Please make sure your final answer(s) are accurate to 2 decimal places Date 2014 General Journal Account/Explanation Page 64 PR Debit Credit 1/Jan HTM investments, bonds... 68,950 Cash. 68,950 Purchase of bonds 31/Dec Cash. 4,900 HTM investments, bonds, 350 Interest income.. 4,550 interest and amortization 2015 31/Dec Cash... 4,900 HTM investments, bonds.. Interest income. 350 4,550 interest and amortization Marking: Journal Entry 1: Purchase of the bonds You have completed this entry correctly. Journal Entry 2: Receipt of interest payment and amortization of discount on investment in bonds 2014 You have entered the correct amount for HTM investments, bonds, however it should have been entered as a debit. This will cost you 1 mark. 'Interest income' should be credited for the amount of $5,250, however, what you have entered is consistent with your earlier entries so you will not lose any marks Journal Entry 3: Receipt of interest payment and amortization of discount on investment in bonds 2015 You have entered the correct amount for 'HTM investments, bonds', however it should have been entered as a debit. This will cost you 1 mark. 'Interest income' should be credited for the amount of $5,250, however, what you have entered is consistent with your earlier entries so you will not lose any marks Northstar Corp. purchased $70,000 of Vision Consulting Inc. 7% bonds at a price of 98.5 on January 1, 2014. The bonds mature on December 31, 2016. Northstar Corp. uses the straight-line method of amortizing any premium or discount on investments in bonds. At December 31, 2014 and 2015, the market value of the bonds is quoted at 98 and 99, respectively. Interest is paid out each year on December 31. Northstar Corp. follows ASPE and management accounts for this investment at amortized cost. Show the entry to record the purchase of the bonds, the entry to be made on December 31, 2014, and the entry to be made on December 31, 2015. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan). Please make sure your final answer(s) are accurate to 2 decimal places Date 2014 General Journal Account/Explanation Page 64 PR Debit Credit 1/Jan HTM investments, bonds... 68,950 Cash. 68,950 Purchase of bonds 31/Dec Cash. 4,900 HTM investments, bonds, 350 Interest income.. 4,550 interest and amortization 2015 31/Dec Cash... 4,900 HTM investments, bonds.. Interest income. 350 4,550 interest and amortization Marking: Journal Entry 1: Purchase of the bonds You have completed this entry correctly. Journal Entry 2: Receipt of interest payment and amortization of discount on investment in bonds 2014 You have entered the correct amount for HTM investments, bonds, however it should have been entered as a debit. This will cost you 1 mark. 'Interest income' should be credited for the amount of $5,250, however, what you have entered is consistent with your earlier entries so you will not lose any marks Journal Entry 3: Receipt of interest payment and amortization of discount on investment in bonds 2015 You have entered the correct amount for 'HTM investments, bonds', however it should have been entered as a debit. This will cost you 1 mark. 'Interest income' should be credited for the amount of $5,250, however, what you have entered is consistent with your earlier entries so you will not lose any marks