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May I get help with the wrong ones Recording Entries for AFS Debt Securities Effective Interest Method Adjust FVA at Sale and Year-End On July
May I get help with the wrong ones
Recording Entries for AFS Debt Securities Effective Interest Method Adjust FVA at Sale and Year-End On July 1, 2020, West Company purchased for cash, six $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 AFS securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discount or premium. Amortization Schedule Journal Entries and FS Presentation for 2020 Journal Entries for 2021 a. Prepare a bond amortization schedule for 2020 and 2021 using the effective interest method. Note: Round each amount to the nearest whole dollar. Use the rounded amount for later calculations in the schedule. Date Market Stated Interest Interest July 1, 2020 Jan. 1, 2021 $ July 1, 2021 Discount Bond Amortization Amortized Cost $ 58,386 x $ 224 587,097 x 235 58,935 x $ 2,700 2,700 2,924 2,935 b. Record the entry for the purchase of the bonds by West Company on July 1, 2020. C. Record the adjusting entries by West Company on December 31, 2020, to accrue interest revenue and adjust the investment to fair value. 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: Round each amount to the nearest whole dollar. Use the rounded amount for later calculations in the schedule. Cr. Dr. 2,613 x Date Account Name . July 1, 2020 Investment in Stock Cash c. Dec 31, 2020 Interest Receivable Dividend Revenue 57,387 x 0 5.400 x 339 x x X 5,739 X Investment income To accrue interest revenue. Dec 31, 2020 Investment Income Unrealized Gain or Loss-Income To adjust investment to fair value 7.075 X O 1.800 X d. Indicate the effects of this investment on the 2020 income statement and year-end balance sheet. Note: List accounts in alphabetical order. Note: Do not use a negative sign for an account with a normal balance. 2020 2,476 x 2020 Income Statement Other revenues and Gains Interest Revenue Balance Sheet, December 31 , Assets Interest Receivable Interest Receivable Stockholders' Equity 64,800 X (1.300) X X Recording Entries for AFS Debt Securities Effective Interest Method Adjust FVA at Sale and Year-End On July 1, 2020, West Company purchased for cash, six $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 AFS securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discount or premium. Amortization Schedule Journal Entries and FS Presentation for 2020 Journal Entries for 2021 a. Prepare a bond amortization schedule for 2020 and 2021 using the effective interest method. Note: Round each amount to the nearest whole dollar. Use the rounded amount for later calculations in the schedule. Date Market Stated Interest Interest July 1, 2020 Jan. 1, 2021 $ July 1, 2021 Discount Bond Amortization Amortized Cost $ 58,386 x $ 224 587,097 x 235 58,935 x $ 2,700 2,700 2,924 2,935 b. Record the entry for the purchase of the bonds by West Company on July 1, 2020. C. Record the adjusting entries by West Company on December 31, 2020, to accrue interest revenue and adjust the investment to fair value. 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: Round each amount to the nearest whole dollar. Use the rounded amount for later calculations in the schedule. Cr. Dr. 2,613 x Date Account Name . July 1, 2020 Investment in Stock Cash c. Dec 31, 2020 Interest Receivable Dividend Revenue 57,387 x 0 5.400 x 339 x x X 5,739 X Investment income To accrue interest revenue. Dec 31, 2020 Investment Income Unrealized Gain or Loss-Income To adjust investment to fair value 7.075 X O 1.800 X d. Indicate the effects of this investment on the 2020 income statement and year-end balance sheet. Note: List accounts in alphabetical order. Note: Do not use a negative sign for an account with a normal balance. 2020 2,476 x 2020 Income Statement Other revenues and Gains Interest Revenue Balance Sheet, December 31 , Assets Interest Receivable Interest Receivable Stockholders' Equity 64,800 X (1.300) X XStep by Step Solution
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