On January 1, 2021, Teal Mountain Inc., a public company, purchased $660.000 of Pearl Corporation's five-year, 4% bonds for $690,433 when the market interest rate was 3%. Interest is received semi-annually on July 1 and January 1. Teal Mountain's year end is December 31. Teal Mountain intends to hold Pearl's bonds until January 1, 2026, the date the bonds mature. The bonds' fair value on December 31, 2021. was $680,000 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 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, eg. 5,276.) Date Account Titles and Explanation Debit Credit Jul. 1 (To record collection of interest on bonds.) 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 decimal places, eg. 5,276.) Date Account Titles and Explanation Debit Credit Dec. 31 (To accrue interest revenue) Show the financial presentation of the bonds for Teal Mountain on December 31, 2021. (Round answers to decimal places, eg. 5,276.) TEAL MOUNTAIN INC. Partial Balance Sheet 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.) 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.) 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, eg. 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 record collection of interest on bonds.) Dec. 31 (To accrue interest revenue.) Dec. 31 (To record fair value adjustment.) Save for Later Attempts: 0 of 1 used Submit
