Question
On January 1, 2020, Sweet Company purchased 9% bonds having a maturity value of $210,000, for $227,221.68. The bonds provide the bondholders with a 7%
On January 1, 2020, Sweet Company purchased 9% bonds having a maturity value of $210,000, for $227,221.68. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Sweet 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, e.g. 2,525.25.)
Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 2,525.25.)
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.)
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.)
Debit Credit Date Account Titles and Explanation Jan. 1, 2020 Schedule of Interest Revenue and Bond Premium Amortization Effective-Interest Method Interest Premium Revenue Amortized Cash Received Carrying Amount of Bonds Date 1/1/20 $ 1/1/21 1/1/22 1/1/23 1/1/24 1/1/25 Debit Credit Date Account Titles and Explanation Dec. 31, 2020 Debit Credit Date Account Titles and Explanation Dec. 31, 2021
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