On January 1, 2009, Dermot Company purchased 10% bonds having a maturity value of $50,000 for $432,000.
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Question:
On January 1, 2009, Dermot Company purchased 10% bonds having a maturity value of $50,000 for $432,000. The bonds provide the bondholders with a 12% yield. The coupon is paid annually on December 31. The bond market value was $440,000 on December 31, 2009.
Required:
Prepare the appropriate journal entry on December 31, 2009, to properly value the bonds assuming the bonds are classified as:
(1) Held-to-maturity securities.
(2) Securities available for sale.
(3) Trading securities.
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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