On January 1, 2021, Pine Retailers purchased $100,000 of Elm Company bonds. The Elm bonds mature...
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On January 1, 2021, Pine Retailers purchased $100,000 of Elm Company bonds. The Elm bonds mature on December 31, 2025 and pay 7% interest. The bonds were purchased when the market interest rate was 7.2% for bonds of similar risk and maturity. The Elm bonds pay interest annually on December 31 of each year. Pine accounts for the bonds as an available for sale investment and uses the effective interest method. On December 31, 2021 the Elm bonds have a fair value of $102,500. Changes in value are a result of changes in market interest rates. On December 31, 2022 the Elm bonds have a fair value of $103,500. Changes in value are a result of changes in market interest rates. On Jan. 1, 2023 Pine sells its Elm company bonds at a price of 103,500. JUTT THUS Required: Prepare the journal entry that Pine will make for these investments. DATE ACCOUNT TITLE DEBIT CREDIT 4 On January 1, 2021, Pine Retailers purchased $100,000 of Elm Company bonds. The Elm bonds mature on December 31, 2025 and pay 7% interest. The bonds were purchased when the market interest rate was 7.2% for bonds of similar risk and maturity. The Elm bonds pay interest annually on December 31 of each year. Pine accounts for the bonds as an available for sale investment and uses the effective interest method. On December 31, 2021 the Elm bonds have a fair value of $102,500. Changes in value are a result of changes in market interest rates. On December 31, 2022 the Elm bonds have a fair value of $103,500. Changes in value are a result of changes in market interest rates. On Jan. 1, 2023 Pine sells its Elm company bonds at a price of 103,500. JUTT THUS Required: Prepare the journal entry that Pine will make for these investments. DATE ACCOUNT TITLE DEBIT CREDIT 4
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Related Book For
Accounting Principles Volume 2
ISBN: 978-1119502555
8th Canadian Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
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