On January 1, 2025, Blossom Company purchased 5% bonds, having a maturity value of $400,000 for $343,150. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2025, and mature January 1, 2035, with interest receivable June 30 and December 31 of each year. Blossom Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale. The fair value of the bonds at December 31 of each year-end is as follows. 2025 $344,000 2028 $364,000 2026 339,000 2029 384,000 2027 334,000 (a) Prepare the journal entry at the date of the band purchase. (b) Prepare the journal entries to record the interest received and recognition of fair value for 2025. (c) Prepare the journal entry to record the recognition of fair value for 2026. (Round answers to O decimal places, eg. 2.525. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries) No. Date Account Titles and Explanation Debit (a) (b) (To record interest received) (c) (To record fair value adjustment) ПО ПО 금든
On January 1, 2025, Blossom Company purchased 5% bonds, having a maturity value of $400,000 for $343,150. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2025, and mature January 1, 2035, with interest receivable June 30 and December 31 of each year. Blossom Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale. The fair value of the bonds at December 31 of each year-end is as follows. 2025 $344,000 2028 $364,000 2026 339,000 2029 384,000 2027 334,000 (a) Prepare the journal entry at the date of the band purchase. (b) Prepare the journal entries to record the interest received and recognition of fair value for 2025. (c) Prepare the journal entry to record the recognition of fair value for 2026. (Round answers to O decimal places, eg. 2.525. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries) No. Date Account Titles and Explanation Debit (a) (b) (To record interest received) (c) (To record fair value adjustment) ПО ПО 금든
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 5PA: Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July...
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