WellmanWellman

Insurance purchased

$50,000

of

8%

KLP

bonds on January 1,

2018,

at a price of

92

when the market rate of interest was

10%.

WellmanWellman

intends to hold the bonds until their maturity date of January 1,

2023.

The bonds pay interest semiannually on each January 1 and July 1.

Wellman

recorded the following journal entries on January 1,

2018

and July 1,

2018:

Make the adjusting entries that

WellmanWellman

Insurance would need to make on December 31,

20182018,

related to the investment in

KLP

bonds. (Record debits first, then credits. Exclude explanations from any journal entries.)First, record the entry for the interest receivable at December 31,

2018.

Journal Entry
Date		Accounts	Debit	Credit
Dec	31

Now record the entry for the amortization of bond discount at December 31,

2018.

Journal Entry
Date		Accounts	Debit	Credit
Dec	31

How would the bonds be reported on

WellmanWellman

Insurance's balance sheet as of December 31,

2018?

(Abbreviation used: AFSS = available-for-sale security)

The balance sheet reports			of $		as a		.
Also, the balance sheet will include the			of $		.

What amount of interest revenue would be reported on

WellmanWellman

Insurance's income statement for the year ended December 31,

2018,

related to the

KLP

bonds?

The income statement reports

of $

.