On January 1, Gandini Company purchased $300,000 face value of Battaglias 8.4% bonds at a price of

Question:

On January 1, Gandini Company purchased $300,000 face value of Battagliaâ€™s 8.4% bonds at a price of $283,439. At this price, the bonds yielded 9% annually. At December 31, Gandini received an interest check on these bonds of $25,200. The market price of these bonds that day was $282,000.

Required

A. Using the format presented in this chapter, show the entries that would be made to the accounting system to record the purchase of this investment and receipt of the interest check. Assume this is a long-term investment.

B. Show how this investment should be reported in the year-end financial statements by completing the table of information thatfollows.

On January 1, Gandini Company purchased $300,000 face value of

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...