On January 1, 2021, Sage Hill Inc., a public company, purchased $610,000 of Pearl Corporation's five-year, 4% bonds for $638,128 when the market interest rate was 3%. Interest is received semi-annually on July 1 and January 1. Sage Hill's year end is December 31. Sage Hill intends to hold Pearl's bonds until January 1, 2026, the date the bonds mature. The bonds' fair value on December 31, 2021, was $620,000. Record the purchase of the bonds on January 1, 2021. (Credit account titles are automatically indented when the 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 Trading Investments-Pearl Bonds Trading Investments-Pearl Bonds Investment Income or Loss Interest Revenue e Textbi Interest Receivable Cash No Entry Question Pa Interest Payable --/0.12 Short-Term Investment at FVTPL-Bonds Prepare th Long-Term Investment at FVTOCI - Bonds is entered. Investments at Amortized Cost answers to decimal places, e.g. 5,276.) July 1, 2021. (Credit account titles are automatically indented when the amount select "No Entry" for the account titles and enter for the amounts. Round Date Account Titles and Explanation Debit Credit 1 Type here to search o EI Question Part Score --/0.12 Prepare the entry to record the receipt of interest on July 1, 2021. (Credit account titles are automatically indented when the 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 O decimal places, e.g. 5,276.) Date Account Titles and Explanation Debit Credit Jul. 1 (To record collection of interest on bonds.) e Textbook and Media Question Part Score --/0.12 Prepare the adjusting entry required at December 31, 2021. (Credit account titles are automatically indented when the 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 0 decimal places, e.g. 5,276.) 1 H Type here to search o Question Part Score --/0.12 Prepare the adjusting entry required at December 31, 2021. (Credit account titles are automatically indented when the 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 O decimal places, e.g. 5,276.) Date Account Titles and Explanation Debit Credit Dec. 31 (To accrue interest revenue.) e Textbook and Media Question Part Score --/0.12 Show the financial presentation of the bonds for Sage Hill on December 31, 2021. (Round answers to 0 decimal places, e.g. 5,276.) SAGE HILL INC. H Type here to search O Ei 0 Question Part Score --/0.12 Show the financial presentation of the bonds for Sage Hill on December 31, 2021. (Round answers to 0 decimal places, e.g. 5,276.) SAGE HILL INC. Partial Balance Sheet $ e Textbook and Media Question Part Score --/0.12 Prepare the entry to record the receipt of interest on January 1, 2022. (Credit account titles are automatically indented when the 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 Type here to search W x Question 2 of 4 - / 1 E Prepare the entry to record the receipt of interest on January 1, 2022. (Credit account titles are automatically indented when the 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 (Collection of interest receivable.) e Textbook and Media Question Part Score --/0.12 Prepare the entry to record the receipt on maturity of the bonds on January 1, 2026. Assume the entry to record the last interest payment has been recorded. (Credit account titles are automatically indented when the 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 (To record maturity of bond investment.) Type here to search O e How would your answers to parts (a) through (c) change if the bonds were purchased for the purpose of trading? (Credit account titles are automatically indented when the 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, e.g. 5,276.) Date Account Titles and Explanation Debit Credit Jan. 1 (To record purchase of investment.) Jul. 1 (To record collection of interest on bonds.) Dec. 31 (To accrue interest revenue.) Dec. 31 (To record fair value adjustment.) H Type here to search O
