Bond Investment Discount Amortization Schedule Tudor Company acquired $500,000 of Carr Corporation bonds for $487,706.69 on January 1, 2013. The bonds carry an 11% stated interest rate, pay interest semiannually on January 1 and July 1, were issued to yield 12% and are due January 1, 2016. Required: 1. Prepare an investment interest income and discount amortization schedule using: a. straight-line method b. effective interest method 2. Prepare the July 1, 2015 journal entries to record the interest income under both methods.

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
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Bond Investment Discount Amortization Schedule

Tudor Company acquired $500,000 of Carr Corporation bonds for $487,706.69 on January 1, 2013. The bonds carry an 11% stated interest rate, pay interest semiannually on January 1 and July 1, were issued to yield 12% and are due January 1, 2016.

Required:

1. Prepare an investment interest income and discount amortization schedule using:

a. straight-line method

b. effective interest method

2. Prepare the July 1, 2015 journal entries to record the interest income under both methods.

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