Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 2020, Metlock Company purchased 10% bonds having a maturity value of $340,000, for $367,149.34. The bonds provide the bondholders with a 8%

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
On January 1, 2020, Metlock Company purchased 10% bonds having a maturity value of $340,000, for $367,149.34. The bonds provide the bondholders with a 8% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Metlock Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category. Prepare the journal entry at the date of the bond purchase. (Enter answers to 2 decimal places, eg. 2,525.25. 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.) Date Account Titles and Explanation Debit Credit Jan. 1.2020 e Textbook and Media List of Accounts Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 2,525.25.) Schedule of Interest Revenue and Bond Premium Amortization Effective Interest Method Cash Interest Premium Received Revenue Amortized Date Carrying Amount of Bonds 1/1/20 $ $ $ 1/1/21 1/1/22 1/1/23 1/1/24 1/1/25 Prepare the journal entry to record the interest revenue and the amortization at December 31, 2020. (Round answers to 2 decimal places, e.g. 2,525.25. 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.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 Prepare the journal entry to record the interest revenue and the amortization at December 31, 2021. (Round answers to 2 decimal places, e.g. 2,525.25. 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.) Account Titles and Explanation Debit Credit Date Dec. 31. 2021

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

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Communication And Auditing A Step By Step Guide

Authors: Melanie McKay, Elizabeth Rosa

1st Edition

075931652X, 978-0759316522

More Books

Students also viewed these Accounting questions