Problem D-3A (Algo) Account for investments in debt securities (LO D-5) [The following information applies to...

Transcribed Image Text:

Problem D-3A (Algo) Account for investments in debt securities (LO D-5) [The following information applies to the questions displayed below.] On January 1, Twister Enterprises issues $450,000 of 7% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 8%. National Hydraulics, a supplier of mechanical parts to Twister Enterprises, purchases 20% of the bond issue ($90,000 face amount) at a discount for $81,093. Problem D-3A (Algo) Part 1 Required: 1. Complete the first three rows of an amortization table for National Hydraulics. (Round your answers to the nearest whole dollar amount.) Date Cash Received Interest Revenue Amortization of Discount Amortized Cost 1/1 6/30 12/31 Problem D-3A (Algo) Part 2 2. Record the purchase of the bonds by National Hydraulics and the receipt of the first two semiannual interest payments on June 30 and December 31. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list Journal entry worksheet 1 2 3 Record the purchase of bonds. Note: Enter debits before credits. Date January 01 General Journal Debit Credit Record entry Clear entry View general journal Problem D-3A (Algo) Part 2 2. Record the purchase of the bonds by National Hydraulics and the receipt of the first two semiannual interest payments on June 30 and December 31. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list Journal entry worksheet < 2 3 Record the receipt of first semiannual interest payment. Note: Enter debits before credits. Datel June 30 General Journal Debit Credit Record entry Clear entry View general journal Problem D-3A (Algo) Part 2 2. Record the purchase of the bonds by National Hydraulics and the receipt of the first two semiannual interest payments on June 30 and December 31. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list Journal entry worksheet 1 2 3 Record the receipt of second semiannual interest payment. Note: Enter debits before credits. Date December 31 General Journal Debit Credit Record entry Clear entry View general journal Problem D-3A (Algo) Part 3 3. Record the sale of the bonds by National Hydraulics on December 31, for $100,000. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list Journal entry worksheet < 1 Record the sale of bonds before maturity. Note: Enter debits before credits.. Date December 31 General Journal Debit Credit Record entry Clear entry View general journal Problem D-3A (Algo) Account for investments in debt securities (LO D-5) [The following information applies to the questions displayed below.] On January 1, Twister Enterprises issues $450,000 of 7% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 8%. National Hydraulics, a supplier of mechanical parts to Twister Enterprises, purchases 20% of the bond issue ($90,000 face amount) at a discount for $81,093. Problem D-3A (Algo) Part 1 Required: 1. Complete the first three rows of an amortization table for National Hydraulics. (Round your answers to the nearest whole dollar amount.) Date Cash Received Interest Revenue Amortization of Discount Amortized Cost 1/1 6/30 12/31 Problem D-3A (Algo) Part 2 2. Record the purchase of the bonds by National Hydraulics and the receipt of the first two semiannual interest payments on June 30 and December 31. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list Journal entry worksheet 1 2 3 Record the purchase of bonds. Note: Enter debits before credits. Date January 01 General Journal Debit Credit Record entry Clear entry View general journal Problem D-3A (Algo) Part 2 2. Record the purchase of the bonds by National Hydraulics and the receipt of the first two semiannual interest payments on June 30 and December 31. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list Journal entry worksheet < 2 3 Record the receipt of first semiannual interest payment. Note: Enter debits before credits. Datel June 30 General Journal Debit Credit Record entry Clear entry View general journal Problem D-3A (Algo) Part 2 2. Record the purchase of the bonds by National Hydraulics and the receipt of the first two semiannual interest payments on June 30 and December 31. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list Journal entry worksheet 1 2 3 Record the receipt of second semiannual interest payment. Note: Enter debits before credits. Date December 31 General Journal Debit Credit Record entry Clear entry View general journal Problem D-3A (Algo) Part 3 3. Record the sale of the bonds by National Hydraulics on December 31, for $100,000. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list Journal entry worksheet < 1 Record the sale of bonds before maturity. Note: Enter debits before credits.. Date December 31 General Journal Debit Credit Record entry Clear entry View general journal