On January 1, 2020, the HHI Company purchased 10% coupon-rate bonds with a face value of...

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On January 1, 2020, the HHI Company purchased 10% coupon-rate bonds with a face value of $250,000. The maturity date is December 31, 2030. The interests are paid semiannually on June 30 and December 31. The market interest rate (yield) was 12%. The bonds were classified as held-to-maturity. Required: Prepare journal entries to record: (1) the purchase of the bonds on January 1, 2020; (2) the necessary adjustments on June 30, 2021 (3) the necessary adjustments on December 31, 2021 Show the necessary calculations. For each step in the calculation, round to 2 decimal places (besically round to nearest cent). Hint: Constructing a bond premium/amortization schedule will be useful. Use the PV tables provided with your Answer Booklet. Using the calculator may cause you to get slightly different answers. On January 1, 2020, the HHI Company purchased 10% coupon-rate bonds with a face value of $250,000. The maturity date is December 31, 2030. The interests are paid semiannually on June 30 and December 31. The market interest rate (yield) was 12%. The bonds were classified as held-to-maturity. Required: Prepare journal entries to record: (1) the purchase of the bonds on January 1, 2020; (2) the necessary adjustments on June 30, 2021 (3) the necessary adjustments on December 31, 2021 Show the necessary calculations. For each step in the calculation, round to 2 decimal places (besically round to nearest cent). Hint: Constructing a bond premium/amortization schedule will be useful. Use the PV tables provided with your Answer Booklet. Using the calculator may cause you to get slightly different answers.

Answer rating: 100% (QA)

1 Journal entry to record the purchase of the bonds on January 1 2020 Debit HeldtoMaturity Investments 22316227 Credit Cash 22316227 Calculation The purchase price of the bonds is calculated using the ... View the full answer