2. On December 31, 2020, Wanda Fish Co. purchased $825,000 face value of 15-year bonds issued on that date by Gold Health and Beauty Products Inc. at a price to yield investors 7.4%. The bonds paid interest at a stated coupon interest rate of 7.5% in semiannual installments on June 30 and December 31.

a. Use a financial calculator or Excel to compute the total amount of cash paid by Wanda Fish Co. to purchase the $825,000 of the Gold Health and Beauty Products Inc. bonds. Then calculate the quoted bond price at which the securities were purchased by Wanda Fish Co.

Provide the values that you input into your calculator or the Excel formula with the values that you used to compute the amount of cash paid by Wanda Fish Co. to purchase the bonds.

Total Cash Paid by Wanda Fish Co. (4 points)	Your Answer
Quoted Price of the Gold Health and Beauty Products Inc. bonds at issuance (2 points)	Your Answer

b. Prepare the general journal entry required to record the purchase of bonds by Wanda Fish Co. The Company classified the bonds as available-for-sale securities. (4 points)

DATE	ACCOUNT NAMES	DEBIT	CREDIT

c. Use the amortization table provided to compute the amount of interest revenue earned on the bonds by Wanda Fish Co. during 2021 and the resulting amortized cost of the bond investment at December 31, 2021 under the effective interest method. (8 points)

Period	Interest Revenue	Cash Received		Amortization of Discount (Premium)	Carrying Value Amortized Cost
0
1
2

d. Prepare the general journal entries required to record the bond interest payments received by Wanda Fish Co. on June 30, 2021 and on December 31, 2021. (6 points)

DATE	ACCOUNT NAMES	DEBIT	CREDIT

e. At December 31, 2021, the Gold Health and Beauty Products Inc. bonds were selling at 99 .

Prepare the adjusting general journal entry required to record the unrealized holding gain (loss) recognized by Wanda Fish Co. at December 31, 2021 relative to the Gold Health and Beauty Products Inc. bonds. The bonds were the first investment in debt securities ever made by Wanda Fish Co. (4 points)

DATE	ACCOUNT NAMES	DEBIT	CREDIT

Supporting Calculations Required:

f. Complete the following table to indicate the items and amounts reported by Wanda Fish Co. in its 2021 GAAP financial statements relative to the bonds classified as available-for-sale assuming the Company does not intend to sell the bonds during 2020. (4 points)

Statement of Financial Position at December 31, 2021:	Amount
Current Assets: Noncurrent Assets:

Comprehensive Income Statement for the Fiscal Year 2021:	Amount
Nonoperating Items: (in Net Earnings) Other Comprehensive Income: