Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I just need help on this one part. all other parts i have answered correctly On February 1, 2021, Cromley Motor Products Issued 6% bonds,
I just need help on this one part. all other parts i have answered correctly
On February 1, 2021, Cromley Motor Products Issued 6% bonds, dated February 1, with a face amount of $75 million. The bonds mature on January 31, 2025 (4 years). The market yleld for bonds of similar risk and maturity was 8%. Interest is paid semiannually on July 31 and January 31. Barnwell Industries acquired $75.000 of the bonds as a long-term Investment. The fiscal years of both firms end December 31. (FV of $1. PV of $1. FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds issued on February 1, 2021. 2-a. Prepare amortization schedules that Indicate Cromley's effective Interest expense for each Interest period during the term to maturity 2-b. Prepare amortization schedules that Indicate Barnwell's effective Interest revenue for each Interest period during the term to maturity 3. Prepare the journal entries to record the issuance of the bonds by Cromley and Barnwell's Investment on February 1, 2021. 4. Prepare the journal entries by both firms to record all subsequent events related to the bonds through January 31, 2023. Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 Red 2A Reg 2B Req3 Reg 4 Cromley Rey 4 Barnwell Prepare the journal entries by Barnwell to record all subsequent events related to the bonds through January 31, 2023. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) No Date General Journal Credit Debit 69,950,415 1 July 31, 2021 $ Investment in bonds Cash 69,950,415 3.000 December 31, 204 Cash Interest revenue 3.000 X 500 January 31, 2022 Investment in bonds Interest revenue 500 July 31, 2022 3,000 Cash Interest revenue 3,000 5 530 December 31, 202 Investment in bonds Interest revenue 530 X 580 January 31, 2023 Cash Interest revenue x 560Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started