On January 1, 2025, Dagwood Company purchased at par 6% bonds having a maturity value of $300,000.

Question:

On January 1, 2025, Dagwood Company purchased at par 6% bonds having a maturity value of $300,000. They are dated January 1, 2025, and mature January 1, 2030, with interest received on January 1 of each year. The bonds are classified in the held-to-maturity category.


Instructions

a. Prepare the journal entry at the date of the bond purchase.

b. Prepare the journal entry to record the interest revenue on December 31, 2025.

c. Prepare the journal entry to record the interest received on January 1, 2026.

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Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 9781119790976

18th Edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

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