Problem 17-2 On January 1, 2017, Flint Company purchased $290,000, 6 % bonds of Aguirre Co. for $266,477. The bonds were purchased to yield 8 % interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2022. Flint Company uses the effective-interest method to amortize discount or premium. On January 1, 2019, Flint Company sold the bonds for $267,985 after receiving interest to meet its liquidity needs. Your answer is correct Prepare the journal entry to record the purchase of bonds on January 1. Assume that the bonds are classified as available-for-sale. (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.) Account Titles and Explanation Debit Credit Date Jan. 1, 2017 Debt Investments 266477 Cash 266477 SHOW LIST OF ACCOUNTS SHOW ANSWER LINK TO TEXT Your answer is partially correct. Try again. Prepare the amortization schedule for the bonds. (Round answers to 0 decimal places, e.g. 1,250.) Schedule of Interest Revenue and Bond Discount Amortization-Effective- Interest Method Bonds Purchased to Yield Bond Interest Receivable Carrying Amount of Or Interest Discount Date Cash Received Revenue Amortization Bonds 1/1/17 266477 7/1/17 268436 8700 10659 1959 1/1/18 8700 10738 2038 270474 7/1/18 270474 8700 10819 2119 1/1/19 8700 10904 2204 274797 7/1/19 8700 10992 2292 277089 1/1/20 8700 11084 2384 279473 8700 7/1/20 281952 11179 2479 7/1/21 8700 11381 2681 287211 1/1/22 8700 290000 11489 2789 87000 Total 110523 23523 SHOW LIST OF ACCOUNTS LINK TO TEXT Your answer is incorrect. Try again Prepare the journal entries to record the semiannual interest on (1) July 1, 2017, and (2) December 31, 2017 (c) If the fair value of Aguirre bonds is $269,985 on December 31, 2018, prepare the necessary adjusting entry. (Assume the fair (d) value adjustment balance on January 1, 2017, is a debit of $3,303.) Prepare the journal entry to record the sale of the bonds on January 1, 2019. (e) (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.) Account Titles and Explanation Debit No. Date Credit (c) (1) July 1, 2017 Cash 8700 Debt Investments 1959 10659 Interest Revenue (2) Dec. 31, 2017 Interest Receivable 8700 2038 Debt Investments 10738 Interest Revenue Dec. 31, 2018 Unrealized Holding Gain or Loss Equity (d) Fair Value Adjustment Cash (e) Jan. 1, 2019 Loss on Sale of Investments Debt Investments 7/1/21 8700 11381 2681 287211 290000 1/1/22 8700 11489 2789 23523 87000 110523 Total SHOW LIST OF ACCOUNTS LINK TO TT Your answer is incorrect. Try again. Prepare the journal entries to record the semiannual interest on (1) July 1, 2017, and (2) December 31, 2017. (c) If the fair value of Aguirre bonds is $269,985 on December 31, 2018, prepare the necessary adjusting entry. (Assume the fair value adjustment balance on January 1, 2017, is a debit of $3,303.) (d) Prepare the journal entry to record the sale of the bonds on January 1, 2019. (e) (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.) Account Titles and Explanation Debit No. Date Credit Cash (c) (1) July 1, 2017 8700 Debt Investments 1959 10659 Interest Revenue (2) Dec. 31, 2017 Interest Receivable 8700 Debt Investments 2038 x 10738 Interest Revenue Dec. 31, 2018 Unrealized Holding Gain or Loss Equity (d) x Fair Value Adjustment Cash (e) Jan. 1, 2019 Loss on Sale of Investments Debt Investments Problem 17-2 On January 1, 2017, Flint Company purchased $290,000, 6% bonds of Aguirre Co. for $266,477. The bonds were purchased to yield 8% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2022. Flint Company uses the effective-interest method to amortize discount or premium. On January 1, 2019, Flint Company sold the bonds for $267,985 after receiving interest to meet its liquidity needs Your answer is correct. Prepare the journal entry to record the purchase of bonds on January 1. Assume that the bonds are classified as available-for-sale. (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.) Date Account Titles and Explanation Debit Credit Jan. 1, 2017 Debt Investments 266477 Cash 266477 SHOW LIST OF ACCOUNTS SHOW ANSWER LINK TO TEXT Your answer is partially correct. Try again. Prepare the amortization schedule for the bonds. (Round answers to 0 decimal places, e.g. 1,250.) Schedule of Interest Revenue and Bond Discount Amortization-Effective- Interest Method Bonds Purchased to Yield Interest Receivable Bond Carrying Amount of Discount Or Interest Cash Received Date Revenue Amortization Bonds 1/1/17 266477 7/1/17 8700 10659 1959 268436 1/1/18 8700 2038 10738 270474 270474 7/1/18 8700 10819 2119 1/1/19 10904 274797 8700 2204 7/1/19 8700 10992 2292 277089 1/1/20 8700 11084 2384 279473 2479 7/1/20 11179 281952 8700 1/1/21 8700 2578 284530 11278 7/1/21 8700 11381 2681 287211 Problem 17-2 On January 1, 2017, Flint Company purchased $290,000, 6 % bonds of Aguirre Co. for $266,477. The bonds were purchased to yield 8 % interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2022. Flint Company uses the effective-interest method to amortize discount or premium. On January 1, 2019, Flint Company sold the bonds for $267,985 after receiving interest to meet its liquidity needs. Your answer is correct Prepare the journal entry to record the purchase of bonds on January 1. Assume that the bonds are classified as available-for-sale. (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.) Account Titles and Explanation Debit Credit Date Jan. 1, 2017 Debt Investments 266477 Cash 266477 SHOW LIST OF ACCOUNTS SHOW ANSWER LINK TO TEXT Your answer is partially correct. Try again. Prepare the amortization schedule for the bonds. (Round answers to 0 decimal places, e.g. 1,250.) Schedule of Interest Revenue and Bond Discount Amortization-Effective- Interest Method Bonds Purchased to Yield Bond Interest Receivable Carrying Amount of Or Interest Discount Date Cash Received Revenue Amortization Bonds 1/1/17 266477 7/1/17 268436 8700 10659 1959 1/1/18 8700 10738 2038 270474 7/1/18 270474 8700 10819 2119 1/1/19 8700 10904 2204 274797 7/1/19 8700 10992 2292 277089 1/1/20 8700 11084 2384 279473 8700 7/1/20 281952 11179 2479 7/1/21 8700 11381 2681 287211 1/1/22 8700 290000 11489 2789 87000 Total 110523 23523 SHOW LIST OF ACCOUNTS LINK TO TEXT Your answer is incorrect. Try again Prepare the journal entries to record the semiannual interest on (1) July 1, 2017, and (2) December 31, 2017 (c) If the fair value of Aguirre bonds is $269,985 on December 31, 2018, prepare the necessary adjusting entry. (Assume the fair (d) value adjustment balance on January 1, 2017, is a debit of $3,303.) Prepare the journal entry to record the sale of the bonds on January 1, 2019. (e) (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.) Account Titles and Explanation Debit No. Date Credit (c) (1) July 1, 2017 Cash 8700 Debt Investments 1959 10659 Interest Revenue (2) Dec. 31, 2017 Interest Receivable 8700 2038 Debt Investments 10738 Interest Revenue Dec. 31, 2018 Unrealized Holding Gain or Loss Equity (d) Fair Value Adjustment Cash (e) Jan. 1, 2019 Loss on Sale of Investments Debt Investments 7/1/21 8700 11381 2681 287211 290000 1/1/22 8700 11489 2789 23523 87000 110523 Total SHOW LIST OF ACCOUNTS LINK TO TT Your answer is incorrect. Try again. Prepare the journal entries to record the semiannual interest on (1) July 1, 2017, and (2) December 31, 2017. (c) If the fair value of Aguirre bonds is $269,985 on December 31, 2018, prepare the necessary adjusting entry. (Assume the fair value adjustment balance on January 1, 2017, is a debit of $3,303.) (d) Prepare the journal entry to record the sale of the bonds on January 1, 2019. (e) (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.) Account Titles and Explanation Debit No. Date Credit Cash (c) (1) July 1, 2017 8700 Debt Investments 1959 10659 Interest Revenue (2) Dec. 31, 2017 Interest Receivable 8700 Debt Investments 2038 x 10738 Interest Revenue Dec. 31, 2018 Unrealized Holding Gain or Loss Equity (d) x Fair Value Adjustment Cash (e) Jan. 1, 2019 Loss on Sale of Investments Debt Investments Problem 17-2 On January 1, 2017, Flint Company purchased $290,000, 6% bonds of Aguirre Co. for $266,477. The bonds were purchased to yield 8% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2022. Flint Company uses the effective-interest method to amortize discount or premium. On January 1, 2019, Flint Company sold the bonds for $267,985 after receiving interest to meet its liquidity needs Your answer is correct. Prepare the journal entry to record the purchase of bonds on January 1. Assume that the bonds are classified as available-for-sale. (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.) Date Account Titles and Explanation Debit Credit Jan. 1, 2017 Debt Investments 266477 Cash 266477 SHOW LIST OF ACCOUNTS SHOW ANSWER LINK TO TEXT Your answer is partially correct. Try again. Prepare the amortization schedule for the bonds. (Round answers to 0 decimal places, e.g. 1,250.) Schedule of Interest Revenue and Bond Discount Amortization-Effective- Interest Method Bonds Purchased to Yield Interest Receivable Bond Carrying Amount of Discount Or Interest Cash Received Date Revenue Amortization Bonds 1/1/17 266477 7/1/17 8700 10659 1959 268436 1/1/18 8700 2038 10738 270474 270474 7/1/18 8700 10819 2119 1/1/19 10904 274797 8700 2204 7/1/19 8700 10992 2292 277089 1/1/20 8700 11084 2384 279473 2479 7/1/20 11179 281952 8700 1/1/21 8700 2578 284530 11278 7/1/21 8700 11381 2681 287211