Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale. 12/31/20 12/31/21 12/31/22 Amortized cost $410,900 $445,100 $546,300 Fair value $416,800 $434,600 $546,300 (a) Indicate whether the bonds were purchased at a discount or at a premium. Prepare the adjusting entry to record the bonds at fair value at December 31, 2020. The Fair Value Adjustment account has a debit balance of $1,100 prior to adjustment. (c) Prepare the adjusting entry to record the bonds at fair value at December 31, 2021. (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.)

Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale. 12/31/20 12/31/21 12/31/22 Amortized cost $410,900 $445,100 $546,300 Fair value $416,800 $434,600 $546,300 (a) Indicate whether the bonds were purchased at a discount or at a premium. Prepare the adjusting entry to record the bonds at fair value at December 31, 2020. The Fair Value Adjustment account has a debit balance of $1,100 prior to adjustment. (c) Prepare the adjusting entry to record the bonds at fair value at December 31, 2021. (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.)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 7MCQ

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Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale. 31.12.14 31.12.15 31.12.16Amortized Cost Tk. 491,150 519,442 550000Fair Value Tk. 497,000 509,000 550000Required:(a) Indicate whether the bonds were purchased at a discount or at a premium.(b) Prepare the adjusting entry to record the bonds at fair value at December 31, 2014. The Fair Value Adjustment account has a debit balance of Tk. 1,000 prior to adjustment.(c) Prepare the adjusting entry to record the bonds at fair value at December 31, 2016
(Debt Investments) Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale. 12/31/17 12/31/18 12/31/19 Amortized cost $491,150 $519,442 $550,000 Fair value 497,000 509,000 550,000 Instructions(a) Indicate whether the bonds were purchased at a discount or at a premium.(b) Prepare the adjusting entry to record the bonds at fair value at December 31, 2017. The Fair Value Adjustment account has a debit balance of $1,000 prior to adjustment.(c) Prepare the adjusting entry to record the bonds at fair value at December 31, 2018.
Presented below is information taken from a bond investment amortization schedule with related fair values provided. These bonds are classified as available-for-sale. 12/31/20 12/31/21 12/31/22 Amortized cost $491,150 $519,442 $550,000 Fair value 497,000 509,000 550,000 Instructions a. Indicate whether the bonds were purchased at a discount or at a premium. b. Prepare the adjusting entry to record the bonds at fair value at December 31, 2020. The Fair Value Adjustment account has a debit balance of $1,000 prior to adjustment. c. Prepare the adjusting entry to record the bonds at fair value at December 31, 2021.
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Entries for Available-for-Sale Securities) Assume the same information as in E16.3 except that the securities are classified as available-for-sale. The fair value of the bonds at December 31 of each year-end is as follows. 2025 $320,000 2026 $309,000 2027 $308,000 2028 $310,000 2029 $300,000 Instructions a. Prepare the journal entry at the date of the bond purchase. b. Prepare the journal entries to record the interest revenue and recognition of fair value for 2025. c. Prepare the journal entry to record the recognition of fair value for 2026. E16.3 Carow Corporation purchased on January 1, 2025, as a held-to-maturity investment, $60,000 of the 8%, 5-year bonds of Harrison, Inc. for $65,118, which provides a 6% return. The bonds pay interest semiannually. Prepare Carow’s journal entries for (a) the purchase of the investment, and (b) the receipt of semiannual interest and premium amortization. Assume effective-interest amortization is used.
. Which of the following securities would be classified as marketable securities inthe current asset section of the balance sheet?a) Commercial paper, U.S. Treasury bills, land held for investment.b) Commercial paper, U.S. Treasury bills, negotiable certificates of deposit.c) Commercial paper, land held for investment, bonds with maturities in 10 years.d) U.S. Treasury bills, long-term stock investment, bonds with maturities in 10years.*
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bartleby, a Learneo, Inc. business

	12/31/20	12/31/21	12/31/22
Amortized cost	$410,900	$445,100	$546,300
Fair value	$416,800	$434,600	$546,300

Prepare the adjusting entry to record the bonds at fair value at December 31, 2020. The Fair Value Adjustment account has a debit balance of $1,100 prior to adjustment.
(c)		Prepare the adjusting entry to record the bonds at fair value at December 31, 2021.