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Please prepare the following 6 journal entries Show Current Attempt in Progress On January 1, 2020, Sarasota Limited paid $559,42370 for 12% bonds with a
Please prepare the following 6 journal entries
Show Current Attempt in Progress On January 1, 2020, Sarasota Limited paid $559,42370 for 12% bonds with a maturity value of $520,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature on January 1, 2025, with interest receivable on December 31 of each year, Sarasota applies ASPE using the effective interest method, and has a December 31 year end. Assume that Sarasota hopes to make a gain on the bonds as interest rates are expected to fall Sarasota accounts for the bonds at fair value with changes in value taken to net income and separately recognizes and reports interest income. The fair value of the bonds at December 31 of each Year end is as follows: 2020 $555,600.00 2022 $535.600.00 2022 5533.520.00 2023 $527.280.00 2024 5520,000.00 Prepare the journal entries to record interest income and interest received and recognition of fair value at December 31, 2020, 2021, and 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. Round answers to 2 decimal places, es. 52.75.) Debit Credit Date Account Titles and Explanation Dec 31, 2020 (To record interest collected) Dec 31, 2020 To record fair value adjustment) Dec 31, 2021 (To record interest collected) Dec 31, 2021 (To record fair value adjustment) Dec 31, 2022 (To record interest collected) -21C A (To record fair value adjustment) Dec 31, 2022 (To record interest collected) Dec 31, 2022 (To record gain or loss) Step by Step Solution
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