Quiz chap17 - 1488.19*4/6 = 992.13 217060.41-992.13 =...

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Quiz Chapter 17 Accounting 3312 Spring 2011 Name: __________________________ b) The bonds are sold on November 1, 2011 at 103 plus accrued interest. Amortization was recorded by the effective interest rate method. Prepare all entries required to properly record the sale.(show the calculation) a. Available for sale security 219908.01 cash 219908.01 date 4% cash received 3% interest revenue premium amortization carrying amount 7/1/2010 219,908.01 1/1/2011 8,000.0 0 6,597.24 1,402.76 218,505.25 7/1/2011 8,000.0 0 6,555.1 6 1,444.84 217,060.41 1/1/2012 8,000.0 0 6,511.81 1,488.19 215,572.22 7/1/2012 8,000.0 0 6,467.1 7 1,532.83 214,039.39 1/1/2013 8,000.0 0 6,421.18 1,578.82 212,460.57 8000*4/6 = 5333.33 6511.81*4/6=4341.21
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Unformatted text preview: 1488.19*4/6 = 992.13 217060.41-992.13 = 216068.28 200000*1.03+5333.33 = 211333.33 b. Interest Revenue 992.13 Available for sale securities 992.13 Cash 211333.33 Loss 10068.28 Interest Revenue 5333.33 Available for sale securities 216068.28 Page 1 Investment in debt securities at premium On July 1, 2010, Sprinkle Co. purchased $200,000 of 8% bonds for $219,908.01 plus accrued interest as an available-for-sale security. Interest is paid on July 1 and January 1 and the bonds mature on July 1, 2016. The effective-interest rate is 6%. Instructions (a) Prepare the journal entry on July 1, 2010....
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This note was uploaded on 03/27/2012 for the course ACCT 3312 taught by Professor Staff during the Spring '08 term at Texas A&M University, Corpus Christi.

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