Cameron Ltd. purchased $150,000 of corporate bonds on January 1, 2024. The bonds have a three-year term

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Cameron Ltd. purchased $150,000 of corporate bonds on January 1, 2024. The bonds have a three-year term and are paying interest at a rate of 3% semi-annually on July 1 and January 1. The bonds are purchased at $143,751.21 to yield an interest rate of 4.5%. Cameron Ltd. has a December 31 year end.


Required 

a. Prepare a schedule of interest income and bond discount amortization for this investment. Round to the nearest dollar. 

b. Prepare the necessary journal entries to record the following: 

i. The initial investment purchase. 

ii. The receipt of the first interest payment. 

iii. The interest accrual at the end of the first year. 

iv. The receipt of the second interest payment. 

v. The payment of bond principal at maturity.

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Related Book For  book-img-for-question

Understanding Financial Accounting

ISBN: 9781119715474

3rd Canadian Edition

Authors: Christopher D. Burnley

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