Accounting for debt investments League Up & Co. owns vast amounts of corporate bonds. Suppose League Up buys $900,000 of CocoCorp bonds at face value on January 2, 2018. The CocoCorp bonds pay interest at the annual rate of 8% on June 30 and December 31 and mature on December 31, 2022. League Up intends to hold the investment until maturity. Requirements How would the bond investment be classified on League up’s December 31, 2018, balance sheet? Journalize the following on League Up’s books: a. Receipt of final interest payment, on December 31, 2022. b. Disposition of the investment at maturity on December 31, 2022.
Accounting for debt investments League Up & Co. owns vast amounts of corporate bonds. Suppose League Up buys $900,000 of CocoCorp bonds at face value on January 2, 2018. The CocoCorp bonds pay interest at the annual rate of 8% on June 30 and December 31 and mature on December 31, 2022. League Up intends to hold the investment until maturity. Requirements How would the bond investment be classified on League up’s December 31, 2018, balance sheet? Journalize the following on League Up’s books: a. Receipt of final interest payment, on December 31, 2022. b. Disposition of the investment at maturity on December 31, 2022.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 96PSB
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Accounting for debt investments
League Up & Co. owns vast amounts of corporate bonds. Suppose League Up buys $900,000 of CocoCorp bonds at face value on January 2, 2018. The CocoCorp bonds pay interest at the annual rate of 8% on June 30 and December 31 and mature on December 31, 2022. League Up intends to hold the investment until maturity.
Requirements
- How would the bond investment be classified on League up’s December 31, 2018, balance sheet?
- Journalize the following on League Up’s books:
a. Receipt of final interest payment, on December 31, 2022.
b. Disposition of the investment at maturity on December 31, 2022.
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