On January 1, 2020, Pronghorn Company acquires $270,000 of Spiderman Products, Inc., 9% bonds at a price of $244,500. Interest is received on January 1 of each year, and the bonds mature on January 1, 2023. The investment will provide Pronghorn Company a 13% yield. The bonds are classified as held-to-maturity. (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 0 for the amounts.) No. Account Titles and Explanation Debit Credit (c) (d)
On January 1, 2020, Pronghorn Company acquires $270,000 of Spiderman Products, Inc., 9% bonds at a price of $244,500. Interest is received on January 1 of each year, and the bonds mature on January 1, 2023. The investment will provide Pronghorn Company a 13% yield. The bonds are classified as held-to-maturity. (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 0 for the amounts.) No. Account Titles and Explanation Debit Credit (c) (d)
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
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 16E
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On January 1, 2020, Pronghorn Company acquires $270,000 of Spiderman Products, Inc., 9% bonds at a price of $244,500. Interest is received on January 1 of each year, and the bonds mature on January 1, 2023. The investment will provide Pronghorn Company a 13% yield. The bonds are classified as held-to-maturity.
(c) | Prepare the |
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(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 0 for the amounts.)
No.
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Account Titles and Explanation
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Debit
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Credit
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(c)
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(d)
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