On January 1, 2020, Metlock Company acquires $ 110,000 of Spiderman Products, Inc., 9% bonds at a price of $ 99,611. Interest is received on January 1 of each year, and the bonds mature on January 1, 2023. The investment will provide Metlock Company a 13% yield. The bonds are classified as held-to-maturity. List of Accounts Assistance Used Accumulated Other Comprehensive Loss Allowance for Doubtful Accounts Allowance to Reduce Inventory to Market Bad Debt Expense Bonds Payable Cash Call Option Common Stock Cost of Goods Sold Debt Investments Dividend Revenue Dividend Receivable Equity Investments Fair Value Adjustment Futures Contract Gain on Sale of Investments Gain on Settlement of Call Option Gain on Settlement of Put Option Interest Expense Interest Receivable Interest Revenue Inventory Investment Income Loss on Impairment Loss on Sale of Investments Loss on Settlement of Call Option Loss on Settlement of Put Option No Entry Notes Payable Paid-in Capital in Excess of Par - Common Stock Put Option Recovery of Loss from Impairment Retained Earnings Revenue from Investment Sales Revenue Swap Contract Unrealized Holding Gain or Loss - Equity Unrealized Holding Gain or Loss - Income
On January 1, 2020, Metlock Company acquires $ 110,000 of Spiderman Products, Inc., 9% bonds at a price of $ 99,611. Interest is received on January 1 of each year, and the bonds mature on January 1, 2023. The investment will provide Metlock Company a 13% yield. The bonds are classified as held-to-maturity. List of Accounts Assistance Used Accumulated Other Comprehensive Loss Allowance for Doubtful Accounts Allowance to Reduce Inventory to Market Bad Debt Expense Bonds Payable Cash Call Option Common Stock Cost of Goods Sold Debt Investments Dividend Revenue Dividend Receivable Equity Investments Fair Value Adjustment Futures Contract Gain on Sale of Investments Gain on Settlement of Call Option Gain on Settlement of Put Option Interest Expense Interest Receivable Interest Revenue Inventory Investment Income Loss on Impairment Loss on Sale of Investments Loss on Settlement of Call Option Loss on Settlement of Put Option No Entry Notes Payable Paid-in Capital in Excess of Par - Common Stock Put Option Recovery of Loss from Impairment Retained Earnings Revenue from Investment Sales Revenue Swap Contract Unrealized Holding Gain or Loss - Equity Unrealized Holding Gain or Loss - Income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On January 1, 2020, Metlock Company acquires $ 110,000 of Spiderman Products, Inc., 9% bonds at a price of $ 99,611. Interest is received on January 1 of each year, and the bonds mature on January 1, 2023. The investment will provide Metlock Company a 13% yield. The bonds are classified as held-to-maturity.
List of Accounts
Assistance Used
- Accumulated Other Comprehensive Loss
- Allowance for Doubtful Accounts
- Allowance to Reduce Inventory to Market
Bad Debt Expense- Bonds Payable
- Cash
- Call Option
- Common Stock
- Cost of Goods Sold
- Debt Investments
- Dividend Revenue
- Dividend Receivable
- Equity Investments
- Fair Value Adjustment
- Futures Contract
- Gain on Sale of Investments
- Gain on Settlement of Call Option
- Gain on Settlement of Put Option
- Interest Expense
- Interest Receivable
- Interest Revenue
- Inventory
- Investment Income
- Loss on Impairment
- Loss on Sale of Investments
- Loss on Settlement of Call Option
- Loss on Settlement of Put Option
- No Entry
- Notes Payable
- Paid-in Capital in Excess of Par - Common Stock
- Put Option
- Recovery of Loss from Impairment
Retained Earnings - Revenue from Investment
- Sales Revenue
- Swap Contract
- Unrealized Holding Gain or Loss - Equity
- Unrealized Holding Gain or Loss - Income
Transcribed Image Text:(c)
Prepare the journal entry for the interest revenue and discount amortization under the straight-line method at
December 31, 2021.
(d)
Prepare the journal entry for the interest revenue and discount amortization under the effective-interest method at
December 31, 2021.
(Round answers to 0 decimal places, e.g. 2,500. Credit account titles are automatically indented when amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
No. Account Titles and Explanation
Debit
Credit
(c)
(d)
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