Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On January 1 , 2 0 2 5 , Novak Company purchased 1 2 % bonds having a maturity value of $ 2 9 6
On January Novak Company purchased bonds having a maturity value of $ for
$ The bonds provide the bondholders with a yield. They are dated January and
mature January with interest received on January of each year. Novak Company uses the effective
interest method to allocate unamortized discount or premium. The bonds are classified as availableforsale
category. The fair value of the bonds at December of each yearend is as follows.
a Prepare the journal entry at the date of the bond purchase.
b Prepare the journal entries to record the interest revenue and recognition of fair value for
c Prepare the journal entry to record the recognition of fair value for
List all debit entries before credit entries. Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required, select No Entry" for the account
titles and enter for the amounts. Round answers to decimal places, eg
No
Date
Account Titles and Explanation
Debit
a
b
To record interest received
To record fair value adjustment
c
eTextbook and Media
List of Accounts
Situation :
Wildhorse Cosmetics acquired of the shares of common stock of Martinez Fashion at a total
cost of $ per share on March On June Martinez declared and paid $ cash dividends to
all stockholders. On December Martinez reported net income of $ for the year. At December
the market price of Martinez Fashion was $ per share.
Situation :
Sheffield, Inc. obtained significant influence over Seles Corporation by buying of
Seles's outstanding shares of common stock at a total cost of $ per share on January On
June Seles declared and paid cash dividends of $ to all stockholders. On December Seles
reported a net income of $ for the year.
Prepare all necessary journal entries in for both situations. List all debit entries before credit
entries. Credit account titles are automatically indented when amount is entered. Do not indent
manually. If no entry is required, select No Entry" for the account titles and enter for the amounts.
Record journal entries in the order presented in the problem.
Date
Account Titles and Explanation
Debit
Situation : Wildhorse Cosmetics
Situation : Sheffield, Inc
Step 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