On January 1, 2020, Waterway Company purchased 11% bonds, having a maturity value of $312,000 for $336,270.95. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Waterway Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows. 2020 $333,900 2023 $321,800 2021 $320,900 2024 $312,000 2022 $320,000 (a) Prepare the journal entry at the date of the bond purchase. (b) Prepare the journal entries to record the interest revenue and recognition of fair value for 2020. (c) Prepare the journal entry to record the recognition of fair value for 2021.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “On January 1, 2020, Waterway Company purchased 11% bonds, having a maturity value of $312,000 for $336,270.95. The bonds provide the ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Determine which careers you can enter after completing a training program and which careers require a college degree.
Answers (1)
An industry with oligopolistic competition faces falling profits and its sales growth is slow. Demand for individual brands has become quite elastic--as consumers see competing products as almost homogeneous. Several firms have dropped out.
Answers (1)
If a firm in a perfectly competitive market shuts down in the short run, it will: A. have total revenue greater than its fixed costs. B. have to do this because the price is more than the AVC. C. lose money equal to its total fixed costs. D.
Answers (1)
What is the first step that a smart new-car buyer should take before talking to salespersons and putting a deposit on a car? A. Test-drive the car. B. Obtain car insurance. C. Study the car market. D. Shop around for a car loan.
Answers (1)
On April 1, 2017, Pharoah Company issued $990,000 of 12%, 10-year bonds dated January 1 at par plus accrued interest. Interest is payable semiannually on July 1 and January 1. Prepare journal entries to record the following.
Answers (1)
New Questions in Business
Which of the following is not an issue that is central to the debate regarding market efficiency? A. The magnitude issueB. The tax-loss selling issueC. The lucky event issueD. The selection bias issue
Answers (1)
Which of the following statements is most correct? Many large firms operate different divisions in different industries, and this makes it hard to develop a meaningful set of industry benchmarks for these types of firms.
Answers (1)
A taxpayer sells a warehouse for a recognized gain. Depreciation had been properly claimed on the property based on the straight-line method over a 39-year recovery period.
Answers (1)
Edelman Engines has $11 billion in total assets. Its balance sheet shows $1.1 billion in current liabilities, $7.7 billion in long-term debt, and $2.2 billion in common equity.
Answers (1)
Video quiz the story in the video describes how the ceo of japan airlines, haruka nishimatsu, serves as an example of
Answers (1)