On January 1, 2024, Ithaca Corporation purchases Cortland Incorporated bonds that have a face value of...

Transcribed Image Text:

On January 1, 2024, Ithaca Corporation purchases Cortland Incorporated bonds that have a face value of $340,000. The Cortland bonds have a stated interest rate of 5%. Interest is paid semiannually on June 30 and December 31, and the bonds mature in 10 years. For bonds of similar risk and maturity, the market yield on particular dates is as follows: Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) January 1, 2024 June 30, 2024 December 31, 2024 6.0% 7.0% 8.0% Required: 1-a. Calculate the price Ithaca would have paid for the Cortland bonds on January 1, 2024 (ignoring brokerage fees). 1-b. Prepare a journal entry to record the purchase. 2. Prepare all appropriate journal entries related to the bond investment during 2024, assuming Ithaca accounts for the bonds as a held-to-maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. 3. Prepare all appropriate journal entries related to the bond investment during 2024, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3 Calculate the price Ithaca would have paid for the Cortland bonds on January 1, 2024 (ignoring brokerage fees). Note: Do not round your intermediate calculations and round your final answer to nearest whole number. Bond fair value Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3 Prepare a journal entry to record the purchase. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number. View transaction list Journal entry worksheet 1 Record the purchase of Cortland bonds on January 1, 2024. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Record entry Clear entry View general journal Req 1A Req 1B Req 2 Req 3 Prepare all appropriate journal entries related to the bond investment during 2024, assuming Ithaca accounts for the bonds as a held-to- maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number. View transaction list Journal entry worksheet 1 2 3 4 5 Record the investment in bonds with a face value of $340,000, a stated interest rate of 5% and a market yield of 6%. The bonds pay interest semi- annually. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit Record entry Clear entry View general journal Show less Req 1A Req 1B Req 2 Req 3 Prepare all appropriate journal entries related to the bond investment during 2024, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number. View transaction list Journal entry worksheet 1 2 3 4 5 Record the investment in bonds with a face value of $340,000, a stated interest rate of 5% and a market yield of 6%. The bonds pay interest semi- annually. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit Record entry Clear entry View general journal Show less On January 1, 2024, Ithaca Corporation purchases Cortland Incorporated bonds that have a face value of $340,000. The Cortland bonds have a stated interest rate of 5%. Interest is paid semiannually on June 30 and December 31, and the bonds mature in 10 years. For bonds of similar risk and maturity, the market yield on particular dates is as follows: Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) January 1, 2024 June 30, 2024 December 31, 2024 6.0% 7.0% 8.0% Required: 1-a. Calculate the price Ithaca would have paid for the Cortland bonds on January 1, 2024 (ignoring brokerage fees). 1-b. Prepare a journal entry to record the purchase. 2. Prepare all appropriate journal entries related to the bond investment during 2024, assuming Ithaca accounts for the bonds as a held-to-maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. 3. Prepare all appropriate journal entries related to the bond investment during 2024, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3 Calculate the price Ithaca would have paid for the Cortland bonds on January 1, 2024 (ignoring brokerage fees). Note: Do not round your intermediate calculations and round your final answer to nearest whole number. Bond fair value Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3 Prepare a journal entry to record the purchase. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number. View transaction list Journal entry worksheet 1 Record the purchase of Cortland bonds on January 1, 2024. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Record entry Clear entry View general journal Req 1A Req 1B Req 2 Req 3 Prepare all appropriate journal entries related to the bond investment during 2024, assuming Ithaca accounts for the bonds as a held-to- maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number. View transaction list Journal entry worksheet 1 2 3 4 5 Record the investment in bonds with a face value of $340,000, a stated interest rate of 5% and a market yield of 6%. The bonds pay interest semi- annually. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit Record entry Clear entry View general journal Show less Req 1A Req 1B Req 2 Req 3 Prepare all appropriate journal entries related to the bond investment during 2024, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations and round your final answers to nearest whole number. View transaction list Journal entry worksheet 1 2 3 4 5 Record the investment in bonds with a face value of $340,000, a stated interest rate of 5% and a market yield of 6%. The bonds pay interest semi- annually. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit Record entry Clear entry View general journal Show less