Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Interest Revenue for Held-to-Maturity Securities On January 1, the company purchased debt securities for cash of $25,585. The securities have a face value of $18,000,

Interest Revenue for Held-to-Maturity Securities

On January 1, the company purchased debt securities for cash of $25,585. The securities have a face value of $18,000, and they mature in 15 years. The securities have a stated interest rate of 10%, and interest is paid semiannually, on June 30 and December 31. The prevailing market interest rate on these debt securities is 7% compounded semiannually. The securities were purchased as a held-to-maturity investment.

2. Make the journal entry to record the June 30 receipt of interest. When required, round your answers to the nearest dollar. If an amount box does not require an entry, leave it blank

cash 900
investment in held to maturity securities x
interest revenue x

3. Make the journal entry to record the December 31 receipt of interest. When required, round your answers to the nearest dollar. If an amount box does not require an entry, leave it blank.

cash 900
investment in held to maturity securities x
interest revenue x

I can not figure out the Xs.

Please show how you got your answer. Thank you!

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

Students also viewed these Accounting questions