On January 1, 2020, Splish Company purchased $480,000, 10% bonds of Aguirre Co. for $444,669. The bonds were purchased to yield 12% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1 2025. Splish Company uses the effective interest method to amortize discount or premium. On January 1, 2022. Splish Company sold the bonds for $446,262 after receiving interest to meet its liquidity needs. lc Prepare the journal entries to record the semiannual interest on (1) July 1, 2020, rud (2) December 31, 2020. (d) If the fair value of Aguirre bonds is $448,262 on December 31, 2021, prepare the necessary adjusting entry. IAssume the fair value adjustment balance on December 31, 2020. is a debit of $3,467. le) Prepare the journal entry to record the sale of the bonds on January 1, 2022. (Round answers to decimal places, eg. 2,500. Credit account cicles 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 of No. Date Account Titles and Explanation Debit Credit July 1.2020 Cash 24000 Deblesmente 2630 Interest Revenue 26680 121 Dec. 31.2020 Interest Receivable 24000 Debt Investments 2641 Interest Reveru 26641 (d) Dec 31, 2021 Fair Value Adjustment le) Jan 1 2022 Cash 446262 Loss on Sale of Investments Debt livestments On January 1, 2020, Splish Company purchased $480,000, 10% bonds of Aguirre Co.for $444,669. The bonds were purchased to yield 12% interest, Interest is payable semiannually on July 1 and January 1, The bonds mature on January 1, 2025. Splish Company uses the effective-interest method to arrortize discount or prerrium. On January 1, 2022, Splish Company sold the bonds for $446,262 after receiving interest to meet its liquidity needs. (c) Prepare the journal entries to record the semiannual interest on (1) July 1, 2020, and (2) December 31, 2020. (d) If the fair value of Aguirre bonds is $448,262 on December 31, 2021. prepare the necessary adjusting entry. (Assume the fair value adjustment balance on December 31, 2020, is a debit of $3.467.) le) Prepare the journal entry to record the sale of the bonds on January 1, 2022. (Round answers to decimal places, eg 2,500. 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.) No. Date Account Titles and Explanation Debit Credit July 1, 2020 Cash 24000 Dell Investments 2680 Interest Revenus 26680 12: Dec 31, 2020 Intest Receivable 24000 Debt Investments 28/1 Interest Revenue 26841 Dec 31, 2021 Fair Value Adjustment (e) lan 1.2002 Cash 446262 Loss on Saleol Investments Delat Investments
