B-09.07 Problem

B-09.07 Problem - (b Prepare the journal entry that...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
B-09.07 Petersen Stores invested in $100,000 of face amount of 4-year bonds issued by Erik Food Supply Company on January 1, 20X1. The bonds were purchased at 98, and bear interest at a stated rate of 8% per annum, payable semiannually. (a) Prepare the journal entry to record the initial investment on January, 20X1.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: (b) Prepare the journal entry that Petersen would record on each interest date. (c) Prepare the journal entry that Petersen would record at maturity of the bonds. (d) How much cash flowed "in" and "out" on this investment, and how does the difference compare to total interest income that was recognized?...
View Full Document

This note was uploaded on 02/29/2012 for the course ACCOUNTING 101 taught by Professor Hudack during the Spring '11 term at FIU.

Ask a homework question - tutors are online