On January 1, 2020. Ayayai Limited paid $581,781.20 for 10% bonds with a maturity value of...

Transcribed Image Text:

On January 1, 2020. Ayayai Limited paid $581,781.20 for 10% bonds with a maturity value of $560,000. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2020, and mature on January 1, 2025, with interest receivable on December 31 of each year. Ayayai accounts for the bonds using the amortized cost approach, applies ASPE using the effective interest method, and has a December 31 year end. Your answer is correct. Prepare the journal entry to record the bond purchase. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 2 decimal places, eg. 52.75.) On January 1, 2020. Ayayai Limited paid $581,781.20 for 10% bonds with a maturity value of $560,000. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2020, and mature on January 1, 2025, with interest receivable on December 31 of each year. Ayayai accounts for the bonds using the amortized cost approach, applies ASPE using the effective interest method, and has a December 31 year end. Your answer is correct. Prepare the journal entry to record the bond purchase. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 2 decimal places, eg. 52.75.)

Answer rating: 100% (QA)

Date Account Titles Explanation Debit Credit Jan 012020 Investment in Bonds 58178120 Cash ... View the full answer