The Bradford Company issued 10% bonds, dated January 1, with a face amount of $80 million on January 1, 2024 to Saxton-Bose Corporation. • The bonds mature on December 31, 2033 (10 years). • For bonds of similar risk and maturity, the market yield is 12%. • Interest is paid semiannually on June 30 and December 31. Required: 1. to 3. Prepare the journal entries to record the purchase of the bonds by Saxton-Bose on January 1, 2024, interest revenue on June 30, 2024 and interest revenue on December 31, 2024 (at the effective rate). Note: Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) No 1 2 3 Date January 01, 2024 Cash June 30, 2024 General Journal Discount on investment in bonds Bonds payable Cash Discount on investment in bonds Interest revenue December 31, 20: Cash Discount on investment in bonds Interest revenue Debit 70,824,084 X 9,175,916 2,800,000 X 161,973 2,800,000 X 170,072 Credit 80,000,000 2,961,973 2,970,072

The Bradford Company issued 10% bonds, dated January 1, with a face amount of $80 million on January 1, 2024 to Saxton-Bose Corporation. • The bonds mature on December 31, 2033 (10 years). • For bonds of similar risk and maturity, the market yield is 12%. • Interest is paid semiannually on June 30 and December 31. Required: 1. to 3. Prepare the journal entries to record the purchase of the bonds by Saxton-Bose on January 1, 2024, interest revenue on June 30, 2024 and interest revenue on December 31, 2024 (at the effective rate). Note: Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) No 1 2 3 Date January 01, 2024 Cash June 30, 2024 General Journal Discount on investment in bonds Bonds payable Cash Discount on investment in bonds Interest revenue December 31, 20: Cash Discount on investment in bonds Interest revenue Debit 70,824,084 X 9,175,916 2,800,000 X 161,973 2,800,000 X 170,072 Credit 80,000,000 2,961,973 2,970,072

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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