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Exercise 9-12 On January 1, 2016, Flounder and Lois Company purchased 12% bonds aving a maturity value of S264 000 for 284 0 15 1.
Exercise 9-12 On January 1, 2016, Flounder and Lois Company purchased 12% bonds aving a maturity value of S264 000 for 284 0 15 1. The bonds v det bondho d it a 10% yield. They are dated January 1, 2016, and mature January 1, 2021, with interest receivable December 31 of each year. Flounder and Lois Company uses the effective interest method to allocate unamortized discount or premium. The bonds are classified as amortized cost investments Prepare the journal entry at the date of the bond purchase. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to 2 decimal places, e.g. 52.75) Date Account Titles and Explanation Jan. 1 Debit Credit SHOW LIST OF ACCOUNTS Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 52.75.) Schedule of Interest Revenue and Bond Premium Amortization Effective-Interest Method Date Cash Received Interest Revenue Premium Amortized Carrying Amount of Bonds 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 Prepare the journal entry to record the interest received and the amortization for 2016. (Credit account titles are automatically indented when the 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. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation Debit Credit Dec. 31, 2016 Prepare the journal entry to record the interest received and the amortization for 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation Debit Credit Dec. 31, 2017 List Of Accounts Exercise 9-12 Allowance for Investment Impairment Bond Investment at Amortized Cost Cash Dividends Receivable Dividend Revenue FV-NI Investments FV-OCI Investments Gain on Sale of Investments GST Receivable Interest Expense Interest Income Interest Payable Interest Receivable Investment in Associate Investment Income or Loss Loss on Discontinued Operations Loss on Impairment Loss on Sale of Investments No Entry Note Investment at Amortized Cost Other Investments Recovery of Loss from Impairment Retained Earning:s Unrealized Gain or Loss Unrealized Gain or Loss OCI
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