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10 On 7/1/14, ABC sold 12% bonds having a maturity value of $800,000 for $861,771, resulting in an effective yield of 10%. The bonds are
10 | On 7/1/14, ABC sold 12% bonds having a maturity value of $800,000 for $861,771, resulting in an effective yield of 10%. The bonds are | ||||||||||
dated 7/1/14, and mature 7/1/19. Interest is payable semiannually on July 1 and January 1. ABC uses the effective interest method of | |||||||||||
amortization for bond premium or discount. Record the adjusting entry for the accrual of interest and the related amortization on 12/31/14. | |||||||||||
Hint: Develop an abbreviated amortization schedule to accurately determine the interest expense. | |||||||||||
11 | The following information is available for ABC Corporation at 12/31/14 regarding its investments in stocks of other companies. | ||||||||||
Securities | Cost | Fair Value | |||||||||
2,200 shares of Toyota Corporation Common Stock | $ 100,000 | $ 125,000 | |||||||||
1,100 shares of G.M. Corporation Common Stock | $ 67,000 | $ 34,000 | |||||||||
$ 167,000 | $ 159,000 | ||||||||||
Prepare the adjusting entry (if any) for 2014, assuming the securities are classified as trading. | |||||||||||
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