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On July 1. 2015, Allarco Inc. acquired the following bonds, which Allarco Inc. intended to hold to maturity: Bond Segura Corporation 11% bonds, maturity
On July 1. 2015, Allarco Inc. acquired the following bonds, which Allarco Inc. intended to hold to maturity: Bond Segura Corporation 11% bonds, maturity date December 31, 2020 108 Price Face Amount Purchased $385,000 Northstar Corp. 6% bonds, maturity date, December 31, 2022 97 200,000 Both bonds pay interest annually on December 31. Premium and discount will be amortized on a straight-line basis. Assume Allarco Inc. follows ASPE. Piease make sure your final answer(s) are accurate to 2 decimal places. 1) Prepare the following journal entries to be made on their correct dates in 2015: a. The acquisition of the investments. Accrued interest was paid on the acquisition dates, as appropriate. b. The receipt of interest and the amortization of the premium or discount for Segura Corporation. c. The receipt of interest and the amortization of the premium or discount for Northstar Corp. Enter the transaction letter as the description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie, January 15 would be 15/Jan). General Journal Account/Explanation Page G5 PR Debit Credit Date 2) Show the accounts and the corresponding amounts that would be reported in the 2015 income statement retated to these investments. 2015 3) Calculate the balance for each investment account on the financial statement date. 2015
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