Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Brief Exercise 17-11 Flounder Company invests $8,900,000 in 5% fixed rate corporate bonds on January 1, 2017. All the bonds are classified as available-for-sale and

Brief Exercise 17-11

Flounder Company invests $8,900,000 in 5% fixed rate corporate bonds on January 1, 2017. All the bonds are classified as available-for-sale and are purchased at par. At year-end, market interest rates have declined, and the fair value of the bonds is now $9,575,000. Interest is paid on January 1. Prepare journal entries for Flounder Company to (a) record the transactions related to these bonds in 2017, assuming Flounder does not elect the fair option; and (b) record the transactions related to these bonds in 2017, assuming that Flounder Company elects the fair value option to account for these bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No.

Date

Account Titles and Explanation

Debit

Credit

(a)

image text in transcribed Jan. 1, 2017Dec. 31, 2017

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed Jan. 1, 2017Dec. 31, 2017

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

(To record interest revenue)

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

(To record fair value adjustment)

No.

Date

Account Titles and Explanation

Debit

Credit

(b)

image text in transcribed Jan. 1, 2017Dec. 31, 2017

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed Jan. 1, 2017Dec. 31, 2017

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

(To record interest revenue)

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

(To record fair value adjustment)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Management A Strategic Emphasis

Authors: Edward Blocher, David E. Stout, Gary Cokins, Kung Chen

4th Edition

0073128155, 978-0073128153

More Books

Students also viewed these Accounting questions

Question

Explain how to dispute irrational beliefs. Critical T hinking

Answered: 1 week ago

Question

What is the use of bootstrap program?

Answered: 1 week ago

Question

3. What would you do now if you were Mel Fisher?

Answered: 1 week ago

Question

14.3 Explain WHMISlegislation.

Answered: 1 week ago