On July 1 of the current year, a company paid $200,000 to purchase 7%, 10-year bonds with a par value of $200,000; interest is paid semiannually on June 30 and December 31. The company intends to hold the bonds until they mature. Prepare the journal entries to record (1) the bond purchase, (2) the receipt of the first semiannual interest payment on December 31 of the current year, and (3) the receipt of the second semiannual payment on June 30.
What will be an ideal response?
| (1) | 7/1 | Debt Investments-HTM | 200,000 | ? |
| ? | ? | Cash | ? | 500,000 |
| ? | ? | ? | ? | ? |
| (2) | 12/31 | Cash | 7,000 | ? |
| ? | ? | Interest Revenue ($200,000 * 0.07 * 6/12) | ? | 7,000 |
| ? | ? | ? | ? | ? |
| (3) | 6/30 | Cash | 7,000 | ? |
| ? | ? | Interest Revenue ($200,000 * 0.07 * 6/12) | ? | 7,000 |
You might also like to view...
Cost allocation involves:
A. Calculating an allocation rate for each cost to be allocated. B. Multiplying the allocation rate by the weight of the cost driver. C. Identifying a cost driver for each cost to be allocated. D. All of the answers are correct.
Pricing of services
A) requires the same approach as pricing of products. B) uses a markup percentage to add the cost of overhead to the direct costs of labor, materials, and parts. C) always requires three pricing computations, one for materials, one for parts, and one for labor. D) is less accurate than pricing of products.
The internal rate of return method of analyzing capital investment proposals uses the present value concept to compute an internal rate of return expected from the proposals
Indicate whether the statement is true or false
Which of the following countries has a larger nonprofit workforce than the United States?
a. France b. Australia c. The Netherlands d. United Kingdom e. Israel