Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I have added all parts of the problem. thank you Recording Entries for HTM Debt Securities- Effective Interest Method On July 1, 2020, West Company

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
I have added all parts of the problem. thank you
Recording Entries for HTM Debt Securities- Effective Interest Method On July 1, 2020, West Company purchased for cash, seven $10,000 bonds of North Corporation to yield 10%. The bonds pay 9% interest, payable on a semiannual basis each July 1 and January 1, and mature on July 1, 2023. The bonds are classified as held-to-maturity securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discount or premium. Amortization Schedule Journal Entries in 2020 Financial Statement Presentation Journal Entries in 2021 d. Indicate the effects of this investment on the 2020 income statement and year-end balance sheet. Note: List accounts in alphabetical order. Income Statement 2020 Other Revenues and Gains 0 Balance Sheet December 31, 2020 Assets $ 0 0 e Check Recording Entries for HTM Debt Securities- Effective Interest Method On July 1, 2020, West Company purchased for cash, seven $10,000 bonds of North Corporation to yield 10%. The bonds pay 9% interest, payable on a semiannual basis each July 1 and January 1, and mature on July 1, 2023. The bonds are classified as held-to-maturity securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discount or premium. Amortization Schedule Journal Entries in 2020 Financial Statement Presentation Journal Entries in 2021 Support a. Prepare a bond amortization schedule for 2020 and 2021 using the effective interest method. Note: Round each amount entered into the schedule to the nearest whole dollar. Use the rounded amount for later calculations in the schedule. Discount Bond Date Amortization Amortized Cost Jul 1, 2020 Jan. 1.2021 $ Jul 1, 2021 Stated Interest Market Interest $ $ Check Previous Save Answers Next Recording Entries for HTM Debt Securities-- Effective Interest Method On July 1, 2020, West Company purchased for cash, seven $10,000 bonds of North Corporation to yiel 10%. The bonds pay 9% interest, payable on a semiannual basis each July 1 and January 1, and mature on July 1, 2023. The bonds are classified as held-to-maturity securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discount or premium Amortization Schedule Journal Entries in 2020 Financial Statement Presentation Journal Entries in 2021 b. Record the entry for the purchase of the bonds by West Company on July 1, 2020. c. Record the adjusting entry by West Company on December 31, 2020. The fair value of the bonds at December 31, 2020, was $64,800. Note: List multiple debits or credits (when applicable) in alphabetical order. Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). Date Account Name Jul 1, 2020 Investment in AFS Securities Cash C Dec 31, 2020 Interest Receivable Fair Value Adjustment--AFS Interest Revenue Check Dr. Cr. b. 0 . . . e Recording Entries for HTM Debt Securities- Effective Interest Method On July 1, 2020, West Company purchased for cash, seven $10,000 bonds of North Corporation to yield 10%. The bonds pay 9% interest, payable on a semiannual basis each July 1 and January 1, and mature on July 1, 2023. The bonds are classified as held-to-maturity securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discount or premium. Amortization Schedule Journal Entries in 2020 Financial Statement Presentation Journal Entries in 2021 d. Indicate the effects of this investment on the 2020 income statement and year-end balance sheet. Note: List accounts in alphabetical order. Income Statement 2020 Other Revenues and Gains 0 Balance Sheet December 31, 2020 Assets $ 0 0 e Check Recording Entries for HTM Debt Securities-- Effective Interest Method On July 1, 2020, West Company purchased for cash, seven $10,000 bonds of North Corporation to yield 10%. The bonds pay 9% interest, payable on a semiannual basis each July 1 and January 1, and mature on July 1, 2023. The bonds are classified as held-to-maturity securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discount or premium. Amortization Schedule Journal Entries in 2020 Financial Statement Presentation Journal Entries in 2021 e. Record the receipt of interest on January 1, 2021. f. After the interest payment on July 1, 2021, two of the bonds were sold for $15,440 cash. Provide the required entries on July 1, 2021. Note: List multiple debits or credits (when applicable) in alphabetical order. Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). Date e. Jan 1, 2021 Account Name Dr. Cr. e 0 0 ( 1 Jul 1, 2021 0 OOOOO e 0 e 0 To record receipt of interest JUL 1, 2021 0 0 0 0 0 0 To record sale of bonds. Check

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

Essays On The Quality Of Audited Financial Statements

Authors: Ulf Mohrmann

1st Edition

3832541853, 978-3832541859

More Books

Students also viewed these Accounting questions

Question

6. Identify seven types of hidden histories.

Answered: 1 week ago

Question

What is the relationship between humans and nature?

Answered: 1 week ago