Sandhill Company purchased, on January 1, 2025, as an available-for-sale security, $440,000 of the 6%, 5-year bonds of Oak Corporation for $380,203, which provides an 8% return. The bonds pay interest semi-annually on June 30th and December 31st. For this case, prepare an amortization table. Use the effective-interest method for discount and premium amortization (construct an amortization table). Amortize premium or discount on interest dates and at year-end. (Assume that no reversing entries were made.) Maturity Value of Bonds Purchase Price of Bonds Stated Interest Rate Bond Yield Rate Interest Payment Term (fraction of annual) Date Cash Received Interest Revenue Bond Discount Amortization Carrying Amount of Bonds 1/1/2025 6/30/2025 12/31/2025 6/30/2026 12/31/2026 6/30/2027 12/31/2027 6/30/2028 12/31/2028 6/30/2029 12/31/2029 6/30/2030 12/31/2030 6/30/2031 12/31/2031 6/30/2032 12/31/2032 6/30/2033 12/31/2033 6/30/2034 12/31/2034
Sandhill Company purchased, on January 1, 2025, as an available-for-sale security, $440,000 of the 6%, 5-year bonds of Oak Corporation for $380,203, which provides an 8% return. The bonds pay interest semi-annually on June 30th and December 31st. For this case, prepare an amortization table. Use the effective-interest method for discount and premium amortization (construct an amortization table). Amortize premium or discount on interest dates and at year-end. (Assume that no reversing entries were made.) Maturity Value of Bonds Purchase Price of Bonds Stated Interest Rate Bond Yield Rate Interest Payment Term (fraction of annual) Date Cash Received Interest Revenue Bond Discount Amortization Carrying Amount of Bonds 1/1/2025 6/30/2025 12/31/2025 6/30/2026 12/31/2026 6/30/2027 12/31/2027 6/30/2028 12/31/2028 6/30/2029 12/31/2029 6/30/2030 12/31/2030 6/30/2031 12/31/2031 6/30/2032 12/31/2032 6/30/2033 12/31/2033 6/30/2034 12/31/2034
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
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 3MC: On July 1, 2019, Aldrich Company purchased as an available-for-sale security 200,000 face value, 9%...
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1. Sandhill Company purchased, on January 1, 2025, as an available-for-sale security, $440,000 of the 6%, 5-year bonds of Oak Corporation for $380,203, which provides an 8% return. The bonds pay interest semi-annually on June 30th and December 31st.
For this case, prepare an amortization table. Use the effective-interest method for discount and premium amortization (construct an amortization table). Amortize premium or discount on interest dates and at year-end. (Assume that no reversing entries were made.)
| Maturity Value of Bonds |
| Purchase Price of Bonds |
| Stated Interest Rate |
| Bond Yield Rate |
| Interest Payment Term (fraction of annual) |
| Date | Cash Received | Interest Revenue | Bond Discount Amortization | Carrying Amount of Bonds |
| 1/1/2025 | ||||
| 6/30/2025 | ||||
| 12/31/2025 | ||||
| 6/30/2026 | ||||
| 12/31/2026 | ||||
| 6/30/2027 | ||||
| 12/31/2027 | ||||
| 6/30/2028 | ||||
| 12/31/2028 | ||||
| 6/30/2029 | ||||
| 12/31/2029 | ||||
| 6/30/2030 | ||||
| 12/31/2030 | ||||
| 6/30/2031 | ||||
| 12/31/2031 | ||||
| 6/30/2032 | ||||
| 12/31/2032 | ||||
| 6/30/2033 | ||||
| 12/31/2033 | ||||
| 6/30/2034 | ||||
| 12/31/2034 |
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