On January 2, 20x2. Topsail purchased 50, $1,000 bonds issued by Charlie Company. The bonds pay interest on December 31, at 6% and mature in three years. The bonds were purchased for $47,423 to yield a return of 8%. Topsail's management has the intent to hold the bonds for two years. On December 31, 20X2, the bonds have a fair value of $49,100. On February 1, 20X3, Topsail sold half of the bonds for $24,900. Required: provide the journal entries necessary to record Topsail's investment in Charlie Company's bonds from lanuary 2, 20X2 to February 1, 20X3. Your entry to record the sale on February 1, 20X3 should include a reclassification djustment. Provide supporting calculations

On January 2, 20x2. Topsail purchased 50, $1,000 bonds issued by Charlie Company. The bonds pay interest on December 31, at 6% and mature in three years. The bonds were purchased for $47,423 to yield a return of 8%. Topsail's management has the intent to hold the bonds for two years. On December 31, 20X2, the bonds have a fair value of $49,100. On February 1, 20X3, Topsail sold half of the bonds for $24,900. Required: provide the journal entries necessary to record Topsail's investment in Charlie Company's bonds from lanuary 2, 20X2 to February 1, 20X3. Your entry to record the sale on February 1, 20X3 should include a reclassification djustment. Provide supporting calculations

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 5E

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