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On 1 January 20X4, Queen Company purchased $5,500,000 of Sport Corp. 7% bonds, classified as an FVOCI-Bonds Investment. The bonds pay semi-annual interest each 30

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On 1 January 20X4, Queen Company purchased $5,500,000 of Sport Corp. 7% bonds, classified as an FVOCI-Bonds Investment. The bonds pay semi-annual interest each 30 June and 31 December. The market interest rate was 5% on the date of purchase. The bonds mature on 31 December 20X8. (PV of $1. PVA of $1. and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Calculate the price paid by Queen Company. (Round time value foctor to 5 decimal places. Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount.) Price paid 2. Construct a table that shows interest revenue reported by Queen, and the carrying value of the investment for the first two interest periods. Use the effective interest method. (Round your answers to the nearest whole dollar amount.) Period Cash Payment 2.5% Interest Revenue Premium Amortization Bond Carrying Value 3. Queen has a June 30 year-end. On June 30, 20X4, the fair value of the investment was $5,790,000. Prepare the journal entries required on June 30 related to this Investment. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list Journal entry worksheet Record the Interest revenue. Note: Enter debits before credits Debit General Journal Date Credit 30 June 20X4 4. Prepare the journal entry for the second payment of interest received on December 31, 20X4. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Round your answers to the nearest whole dollar amount.) View transaction list Journal entry worksheet Record the Interest revenue for December 31. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal 1or 4 Next >

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