Question
Following are the non-strategic investment transactions of Corona Inc.: 2023 Jan. 1 Purchased for $81,409 an 9.5%, $78,000 bond that matures in 12 years from
Following are the non-strategic investment transactions of Corona Inc.:
2023 | ||||
Jan. | 1 | Purchased for $81,409 an 9.5%, $78,000 bond that matures in 12 years from Hanna Corporation when the market interest rate was 8.9%. There was a $50 transaction fee included in the above-noted payment amount. Interest is paid semiannually beginning June 30, 2023. The acquisition was made with intention to hold to maturity. | ||
June | 30 | Received interest on the Hanna bond. | ||
July | 1 | Paid $120,521 for a Trust Inc. bond with a par value of $123,000 and a seven-years term. The bond pays interest quarterly beginning September 30, 2023, at the annual rate of 9.3%; the market interest rate on the date of purchase was 9.7%. There was a $50 transaction fee included in the above-noted payment amount. | ||
Sept. | 30 | Received interest on the Trust bond. | ||
Dec. | 31 | Received interest on the Hanna and Trust bonds. | ||
31 | The fair values of the bonds on this date equalled the fair values. |
Required: 1. For each of the bond investments, prepare an amortization schedule showing only 2023 and 2024. (Round your intermediate and final answers to the nearest whole dollar amount. Enter all the amounts as positive values.)
2. Prepare the entries to record the transactions described above. (Enter all the amounts as positive values. Do not round intermediate calculations and round your final answers to the nearest dollar.)
3. Show how the investments would be reported on Coronas December 31, 2023, balance sheet. (Do not round intermediate calculations and round your final answer to the nearest dollar.)
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