Problem 12 11A The following bond transactions occurred during 2018 for the University of Higher Learning (UHL) and Covington Ltd Feb 1 UHL issued $9,000,000 of five year, 4 bonds at 95 (this means 95 of maturity value) at a price to yield a market interest rate of 5 1 The bonds pay interest semi annually on August 1 and February 1 1 Covington Ltd purchased $3,100,000 of UHLs bonds at 95 as a long term investment that was to be held to maturity Aug 1 The semi annual interest on the bonds was paid Prepare all required journal entries for Covington Ltd , the investor, to record the above transactions (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 0 for the amounts Round answers to 0 decimal places, e g 5,275 ) Date Account Titles and Explanation Debit Credit Feb 1 Aug 1 SHOW LIST OF ACCOUNTS LINK TO TEXT How would the journal entries for Covington Ltd change if the investment had been purchased for trading purposes (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 0 for the amounts Round answers to 0 decimal places, e g 5,275 ) Date Account Titles and Explanation Debit Credit Feb 1Aug 1 Feb 1Aug 1 SHOW LIST OF ACCOUNTS LINK TO TEXT Prepare all required entries for UHL, the investee, to record the above transactions (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 0 for the amounts Round answers to 0 decimal places, e g 5,275 ) Date Account Titles and Explanation Debit Credit Feb 1 Aug 1

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Problem 12-11A The following bond transactions occurred during 2018 for the University of Higher Learning (UHL) and Covington Ltd.: Feb. 1 UHL issued $9,000,000 of

Problem 12-11A

The following bond transactions occurred during 2018 for the University of Higher Learning (UHL) and Covington Ltd.:

Feb.	1	UHL issued $9,000,000 of five-year, 4% bonds at 95 (this means 95% of maturity value) at a price to yield a market interest rate of 5.1%. The bonds pay interest semi-annually on August 1 and February 1.
	1	Covington Ltd. purchased $3,100,000 of UHLs bonds at 95 as a long-term investment that was to be held to maturity.
Aug.	1	The semi-annual interest on the bonds was paid.

Prepare all required journal entries for Covington Ltd., the investor, to record the above transactions. (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 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
Feb. 1

Aug. 1

SHOW LIST OF ACCOUNTS
LINK TO TEXT

How would the journal entries for Covington Ltd. change if the investment had been purchased for trading purposes? (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 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
Feb. 1Aug. 1

Feb. 1Aug. 1

SHOW LIST OF ACCOUNTS
LINK TO TEXT

Prepare all required entries for UHL, the investee, to record the above transactions. (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 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)