On July 1, 2023 Bramble Ltd. purchased 6% bonds having a maturity value of $70,000 for...

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On July 1, 2023 Bramble Ltd. purchased 6% bonds having a maturity value of $70,000 for $67,594. The bonds provide the bondholders with a 7% yield. The bonds mature four years later, on July 1, 2027, with interest receivable June 30 and December 31 of each year. Bramble uses the effective interest method to allocate any unamortized discount or premium. The bonds are accounted for using the FV-OCI model with recycling. Bramble has a calendar year end and the fair value of the bonds at December 31, 2023 and 2024 was $68,200 and $68,410 respectively. Assume fair value adjustments are recorded at year end only. Immediately after collecting interest on December 31, 2024, the bonds were sold for $68,410. Prepare the journal entry at the date of 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 O for the amounts. List debit entry before credit entry. Round answers to 0 decimal places, e.g. 5,275.) Account Titles and Explanation Date July 1, 2023 Debit Credit Prepare a bond amortization schedule to December 31, 2024. (Round answers to 0 decimal places, e.g. 5,275.) Schedule of Interest Revenue and Bond Discount Amortization Effective-Interest Method Interest Revenue Cash Received Discount Amortized [1] ||| Amortized Cost of Bonds ||||| Prepare the entry to record interest received December 31, 2023. (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 O for the amounts. List all debit entries before credit entries. Round answers to 0 decimal places, eg. 5,275.) Account Titles and Explanation Date December 31, 2023 (To record collection of interest) eTextbook and Media Date Debit Prepare the year end adjusting entry at December 31, 2023 and June 30, 2024. (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 o for the amounts. List all debit entries before credit entries. Round answers to 0 decimal places, e.g. 5.275) Account Titles and Explanation Credit Debit Credit SUP Prepare the year end adjusting entry at December 31, 2023 and June 30, 2024. (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 O for the amounts. List all debit entries before credit entries. Round answers to O decimal places, e.g. 5,275.) Date Account Titles and Explanation I (To record fair value adjustment). (To record collection of interest) Debit Credit (To record collection of interest) eTextbook and Media Prepare the entry to record interest received December 31, 2024. (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 O for the amounts. List all debit entries before credit entries. Round answers to 0 decimal places, eg. 5,275.) Account Titles and Explanation Date December 31, 2024 (To record collection of interest) eTextbook and Media Debit Credit Prepare the year end adjusting entry at December 31, 2024. (Credit account titles are automatically indented when the amount is Prepare the entry to record interest received December 31, 2024. (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 O for the amounts. List all debit entries before credit entries. Round answers to O decimal places, e.g. 5,275.) Date December 31, 2024 Account Titles and Explanation (To record collection of interest) eTextbook and Media December 31.2024 Date Account Titles and Explanation Debit Prepare the year end adjusting entry at December 31, 2024. (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 O for the amounts. List debit entry before credit entry, Round answers to O decimal places, e.g. 5,275.) Credit Debit Credit Following the three-step approach, prepare the journal entries for the sale of the bond on December 31, 2024, Include the reclassification of unrealized gains and losses to net income. (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 O for the amounts. List all debit entries before credit entries. Round answers to 0 decimal places, e.g. 5,275.) Account Titles and Explanation (To record disposal of the bond) (To reclassify accumulated unrealized gains and losses from OCI to net income) Debit Credit On July 1, 2023 Bramble Ltd. purchased 6% bonds having a maturity value of $70,000 for $67,594. The bonds provide the bondholders with a 7% yield. The bonds mature four years later, on July 1, 2027, with interest receivable June 30 and December 31 of each year. Bramble uses the effective interest method to allocate any unamortized discount or premium. The bonds are accounted for using the FV-OCI model with recycling. Bramble has a calendar year end and the fair value of the bonds at December 31, 2023 and 2024 was $68,200 and $68,410 respectively. Assume fair value adjustments are recorded at year end only. Immediately after collecting interest on December 31, 2024, the bonds were sold for $68,410. Prepare the journal entry at the date of 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 O for the amounts. List debit entry before credit entry. Round answers to 0 decimal places, e.g. 5,275.) Account Titles and Explanation Date July 1, 2023 Debit Credit Prepare a bond amortization schedule to December 31, 2024. (Round answers to 0 decimal places, e.g. 5,275.) Schedule of Interest Revenue and Bond Discount Amortization Effective-Interest Method Interest Revenue Cash Received Discount Amortized [1] ||| Amortized Cost of Bonds ||||| Prepare the entry to record interest received December 31, 2023. (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 O for the amounts. List all debit entries before credit entries. Round answers to 0 decimal places, eg. 5,275.) Account Titles and Explanation Date December 31, 2023 (To record collection of interest) eTextbook and Media Date Debit Prepare the year end adjusting entry at December 31, 2023 and June 30, 2024. (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 o for the amounts. List all debit entries before credit entries. Round answers to 0 decimal places, e.g. 5.275) Account Titles and Explanation Credit Debit Credit SUP Prepare the year end adjusting entry at December 31, 2023 and June 30, 2024. (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 O for the amounts. List all debit entries before credit entries. Round answers to O decimal places, e.g. 5,275.) Date Account Titles and Explanation I (To record fair value adjustment). (To record collection of interest) Debit Credit (To record collection of interest) eTextbook and Media Prepare the entry to record interest received December 31, 2024. (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 O for the amounts. List all debit entries before credit entries. Round answers to 0 decimal places, eg. 5,275.) Account Titles and Explanation Date December 31, 2024 (To record collection of interest) eTextbook and Media Debit Credit Prepare the year end adjusting entry at December 31, 2024. (Credit account titles are automatically indented when the amount is Prepare the entry to record interest received December 31, 2024. (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 O for the amounts. List all debit entries before credit entries. Round answers to O decimal places, e.g. 5,275.) Date December 31, 2024 Account Titles and Explanation (To record collection of interest) eTextbook and Media December 31.2024 Date Account Titles and Explanation Debit Prepare the year end adjusting entry at December 31, 2024. (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 O for the amounts. List debit entry before credit entry, Round answers to O decimal places, e.g. 5,275.) Credit Debit Credit Following the three-step approach, prepare the journal entries for the sale of the bond on December 31, 2024, Include the reclassification of unrealized gains and losses to net income. (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 O for the amounts. List all debit entries before credit entries. Round answers to 0 decimal places, e.g. 5,275.) Account Titles and Explanation (To record disposal of the bond) (To reclassify accumulated unrealized gains and losses from OCI to net income) Debit Credit

Answer rating: 100% (QA)

July 1 2023 Bonds Payable 567594 Cash 567594 To record purchase of bonds Schedule of ... View the full answer