Premium Amortization on Bond Investment and Partial Sale of theInvestment Using the Effective Interest Method On January 1, 2019, HydeCorporation purchased bonds with a face value of $300,000 for$308,373.53. The bonds are due June 30, 2022, carry a 13% stated interestrate, and were purchased to yield 12%. Interest is payable semiannuallyon June 30 and December 31. On March 31, 2020, in contemplation of amajor acquisition, the company sold one-half the bonds for $159,500including accrued interest; the remainder were held until maturity.Required:Prepare the journal entries to record the purchase of the bonds, eachinterest payment, the partial sale of the investment on March 31, 2020,and the retirement of the bond issue on June 30, 2022.
Premium Amortization on Bond Investment and Partial Sale of the
Investment Using the Effective Interest Method On January 1, 2019, Hyde
Corporation purchased bonds with a face value of $300,000 for
$308,373.53. The bonds are due June 30, 2022, carry a 13% stated interest
rate, and were purchased to yield 12%. Interest is payable semiannually
on June 30 and December 31. On March 31, 2020, in contemplation of a
major acquisition, the company sold one-half the bonds for $159,500
including accrued interest; the remainder were held until maturity.
Required:
Prepare the
interest payment, the partial sale of the investment on March 31, 2020,
and the retirement of the bond issue on June 30, 2022.
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