On April 1, 2024, Western Communications, Incorporated, issued 12% bonds, dated March 1, 2024, with face amount of $30 million. . The bonds sold for $29.3 million and mature on February 28, 2027. • Interest is paid semiannually on August 31 and February 28. Stillworth Corporation acquired $30,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31, and both firms use the straight-line method. Required: 1. Prepare the journal entries to record (a) issuance of the bonds by Western and (b) Stillworth's investment on April 1, 2024. 2. Prepare the journal entries by both firms to record all events related to the bonds through maturity.
On April 1, 2024, Western Communications, Incorporated, issued 12% bonds, dated March 1, 2024, with face amount of $30 million. . The bonds sold for $29.3 million and mature on February 28, 2027. • Interest is paid semiannually on August 31 and February 28. Stillworth Corporation acquired $30,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31, and both firms use the straight-line method. Required: 1. Prepare the journal entries to record (a) issuance of the bonds by Western and (b) Stillworth's investment on April 1, 2024. 2. Prepare the journal entries by both firms to record all events related to the bonds through maturity.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 1RE
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Step 1: Meaning of bonds :
VIEWStep 2: The journal entries to record issuance of the bonds by Western on April 1, 2024.
VIEWStep 3: The journal entries to record issuance of the bonds by Stillworth’s investment on April 1, 2024.
VIEWStep 4: (2) Prepare the journal entries for Western Communications Inc.
VIEWStep 5: (2) Prepare the journal entries for Stillworth Corporation.
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