Question
Problem # 12- (A) Cumberland Company purchased $200,000 of 8 percent bonds of ValueRite Corporation on January 1, 2011, at a discount, paying $184,556. The
Problem # 12- (A)
Cumberland Company purchased $200,000 of 8 percent bonds of ValueRite Corporation on January 1, 2011, at a discount, paying $184,556. The bonds mature January 1, 2016 and yield 10% interest payable each July 1 and January1st. Record the Journal entry on Cumberlands books for purchase of the bonds:
(B)
Record the receipt by Cumberland of the first semi-annual interest payment (note: you must calculate the amount of the bond discount amortization pertaining to the first semi-annual payment)
(C)
Assume that Cumberland Company sells its investment in ValueRite bonds on November 1, 2015, at 99 plus accrued interest. Record the journal entry for the discount amortization (4 months). Use the accompanying amortization table (on last page) to assist in your analysis and calculations.
(D)
Assume the same facts as in C (above). Record the journal entry for the sale of the bonds:
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