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Please help with the 3 attached questions in regards to Investments in Accounting II. Thank you, Katie A. VanLaningham Question #1: Carow Corporation purchased, as
Please help with the 3 attached questions in regards to Investments in Accounting II.
Thank you,
Katie A. VanLaningham
Question #1: Carow Corporation purchased, as a held-to-maturity investment, $74,600 of the 10%, 6-year bonds of Harrison, Inc. for $81,601, which provides a 8% return. The bonds pay interest semiannually. Prepare Carow's journal entries for (a) the purchase of the investment, and (b) the receipt of semiannual interest and premium amortization. Assume effective-interest amortization is used. (Round answers to 0 decimal places, e.g. 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 0 for the amounts.) No Account Titles and . Explanation Debit Credit (a) (b) Question #2: Hendricks Corporation purchased trading investment bonds for $54,450 at par. At December 31, Hendricks received annual interest of $2,300, and the fair value of the bonds was $51,490. Prepare Hendricks' journal entries for (a) the purchase of the investment, (b) the interest received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.) (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 0 for the amounts.) No. (a) (b) Account Titles and Explanation Debit Credit (c) Question #3 On January 1, 2013, Dagwood Company purchased at par 11% bonds having a maturity value of $311,300. They are dated January 1, 2013, and mature January 1, 2018, with interest receivable December 31 of each year. The bonds are classified in the held-to-maturity category. (a) Prepare the journal entry at the date of the bond purchase. (b) Prepare the journal entry to record the interest received for 2013. (c) Prepare the journal entry to record the interest received for 2014. (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 0 for the amounts.) No . Date (a) Jan. 1, 2013 (b) Dec. 31, 2013 (c) Dec. 31, 2014 Account Titles and Explanation Debit CreditStep by Step Solution
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