BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
3 views

On April 30, 2019, Aggie Corporation purchased Smith Corporation 10%, 5-year bonds with a face value of $12,000 at par plus four months of accrued interest. Prepare the April 30 journal entry to record the purchase of these available-for-sale securities.

To determine

Prepare the journal entries in the books of Corporation A to record the purchase of these available-for-sale securities.

Explanation

Available for sale securities: these are the securities which are not intended to be sold in the near future and there is no intension to hold the securities till their maturity.

Determine the amount of interest income paid by Corporation A to purchase Corporation S’s 10%, 5-year bonds for ($12,000 face value) plus 4 months accrued interest.

Interest income = Face value of bond×Interest rate ×Number of months accrued12months=$12,000×10%×412=$400

Prepare journal entries in the books of Corporation A to record the purchase of available-for-sale securities

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What is the purpose of the EFTPS?

College Accounting, Chapters 1-27

What is cultural diversity in an organization?

Foundations of Business (MindTap Course List)

FUTURE VALUE OF AN ANNUITY Find the future values of these ordinary annuities. Compounding occurs once a year. ...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)