Answered step by step
Verified Expert Solution
Question
1 Approved Answer
1. Accounting for Available-for-Sale Debt Investments (16 pts) On January 1, 2021, Duck, Inc. purchased 2.5% (annual) Bruins (issuer) bonds with a par value of
1. Accounting for Available-for-Sale Debt Investments (16 pts) On January 1, 2021, Duck, Inc. purchased 2.5% (annual) Bruins (issuer) bonds with a par value of $100,000. The bonds provide the bondholders with a 3% (annual) yield, are dated January 1, 2021, and mature January 1, 2027. Interest is receivable July 1 and January 1 of each year. Duck designates the Bruins bonds in the Available-for-Sale (AFS) portfolio. Required: ) Calculate the cost of the Bruin bonds for Duck and prepare the journal entry on 1/1/21. (3 pts) b) Construct an amortization schedule through 1/1/2023. (2 pts) -) Prepare the journal entries to record the interest received and amortization for 2021. (3 pts) 1) Duck's Bruins bonds have a market value on 12/31/21 of $99,000. Prepare the fair value adjustment journal entry, if necessary. (2 pts)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started