Question
Mickey Corporation purchased $54,000, 6%, 15-year bonds of Minnie Corporation for $57,000 cash on December 31, 2018 as a long-term investment. The bonds pay interest
Mickey Corporation purchased $54,000, 6%, 15-year bonds of Minnie Corporation for $57,000 cash on December 31, 2018 as a long-term investment. The bonds pay interest semi-annually each June 30 and December 31. On December 31, 2019, the fair market value of the bonds is $52,000. Mickey uses the straight-line method of amortization. REQUIRED: A. Indicate the following amounts: Face Value Stated Rate Annual Stated Interest Semi-Annual Stated Interest Price of the Bonds Premium or Discount (circle one)
B. Give the general journal entries for December 31, 2018, June 30, 2019 and December 31, 2019.
C. Indicate the financial statement presentation of the bond investment accounts on December 31, 2019:
D. If the bonds are sold on December 31, 2028 for $59,000, give the general journal entry to record the sale.
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