On January 1, 2015, Roosevelt Company purchased 12% bonds having a maturity value of $500,000 for $537,907.40. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2015, and mature January 1, 2020, with interest receivable on December 31 of each year. Roosevelt's business model is to hold these bonds to collect contractual cash flows. Instructions: 1. Prepare the journal entry at the date of the bond purchase. 2. Prepare a bond amortization schedule. 3. Prepare the journal entry to record the interest received and the amortization for 2015. 4. Prepare the journal entry to record the interest received and the amortization for 2016.

On January 1, 2015, Roosevelt Company purchased 12% bonds having a maturity value of $500,000 for $537,907.40. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2015, and mature January 1, 2020, with interest receivable on December 31 of each year. Roosevelt's business model is to hold these bonds to collect contractual cash flows. Instructions: 1. Prepare the journal entry at the date of the bond purchase. 2. Prepare a bond amortization schedule. 3. Prepare the journal entry to record the interest received and the amortization for 2015. 4. Prepare the journal entry to record the interest received and the amortization for 2016.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 6PA: Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...

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