View Policies Show Attempt History Current Attempt in Progress On January 1, 2021, Bonita Ltd. issued bonds with a maturity value of $5.55 million for $5,319,120, when the market rate of interest was 7%. The bonds have a contractual interest rate of 6% and mature on January 1, 2026. Interest on the bonds is payable semi-annually on July 1 and January 1 of each year. On January 1, 2021. Wildhorse Company, a public company, purchased Bonita Ltd, bonds with a maturity value of $1.11 million to earn interest. On December 31, 2021. the bonds were trading at 97. Both companies' year end is December 31. Click here to view the factor table. Present Value of 1 Click here to view the factor table Present Value of an Annuity of 1 (For calculation purposes, use 5 decimal places as displayed in the factor table provided) Your answer is incorrect. What amount wwny pay for Bonita Ltd's bonds? (Round answer to decide ilaces. es. 5.275.) Wildhorse Company paid 1.063.824 Your answer is partially correct Prepare the journal entry for Wildhorse Company investor) on January 1, 2021. (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 decimal places, eg, 5,275.) Date Account Titles and Explanation Jan. 1 Investments at Amortized Cost Debit Credit 1.063.824 1,063,824 (To record purchase of investment) e Textbook and Media Prepare the journal entries for Wildhorse Company to record: (1) The receipt of Interest on July 1, 2021. (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 decimal ploces, eg, 5.275) Date Account Titles and Explanation Debit July 1 Investments at Amortized Cost Credit Cash Interest Revenue (To record collection of interest on bonds.) Show how the bonds and related income statement accounts would be presented in Wildhorse Company's financial statements for the year ended December 31, 2021. (Round answers to decimal places, eg. 5,275.) WILDHORSE COMPANY Balance Sheet (Partial) December 31, 2021 Current Assets Interest Receivable Non-Current Assets Investments at Amortized Cost WILDHORSE COMPANY Income Statement (Partial) 7021 Other Revenues Interest Revenue Your answer is partially correct. Prepare the journal entry for Bonita Ltd. (investee) on January 1, 2021. (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 decimal places. e. 5.275.) Date Account Titles and Explanation Debit Credit Jan. 1 Bonds Payable (To record issuance of bonds payable.) e Textbook and Media Prepare the journal entries for Bonita Ltd. to record: (1) The payment of interest on July 1, 2021. (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 tities and enter for the amounts. Round answers to decimal places, eg. 5,275) Debit Credit Date Account Titles and Explanation Jul. 1 Interest Pavable Bonds Payable Cash (To record payment of interest on bonds) (2) The accrual of interest expense on December 31, 2021. (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 decim - 5275) Acco explanation Debit Credit Interest Expense Date Dec 31 Bonds Payable Interest Payable (TO accrue Interest expense) You can (3) The payment of interest on January 1, 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 O decimal places, e.g. 5,275.) Debit Date Account Titles and Explanation Jan. 1 Interest Payable Credit Cash (To record payment of interest payable on bonds.) eTextbook and Media Show how the bonds and related income statement accounts would be presented in Bonita Ltd's financial statements for the year ended December 31, 2021. Round answers to decimal places, eg. 5.275) BONITA LTD Balance Sheet (Partial) December 31, 2021 Current Liabilities Interest Payable Non-Current Liabilities Bonds Payable $ BONITA LTD tatement (Partial) Ye Total Revenue interest Reverse
