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Quiz Chapter 17 - 0 $14,001.81 $3,998.19 $462,728.75 July...

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Quiz Chapter 17 Accounting 3312 Name: __________________________ (b) The bonds are sold on September 1, 2012 at 102 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 494,793.02 Cash 494,793.02 b. date cash received interest revenue bond premium amortization carrying amount July 1,2010 $494,793.02 January 1,2011 $18,000.0 0 $14,843.79 $3,156.21 $491,636.81 July 1,2011 $18,000.0 0 $14,749.10 $3,250.90 $488,385.91 January 1,2012 $18,000.0 0 $14,651.58 $3,348.42 $485,037.49 July 1,2012 $18,000.0 0 $14,551.12 $3,448.88 $ 481,588.61 January 1,2013 $ 18,000.00 $14,447.66 $ 3,552.34 $478,036.27 July 1,2013 $18,000.0 0 $14,341.09 $3,658.91 $474,377.36 January 1,2014 $18,000.0 0 $14,231.32 $3,768.68 $470,608.68 July 1,2014 $18,000.0 0 $14,118.26 $3,881.74 $466,726.94 January 1,2015 $18,000.0
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Unformatted text preview: 0 $14,001.81 $3,998.19 $462,728.75 July 1,2015 $18,000.0 0 $13,881.86 $4,118.14 $458,610.61 Jan 1,2016 $18,000.0 0 $13,758.32 $4,241.68 $454,368.93 July 1,2016 $18,000.0 0 $13,631.07 $4,368.93 $450,000.00 Page 1 Investment in debt securities at premium On July 1, 2010, Lexington Co. purchased $450,000 of 8% bonds for $ 494,793.02 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. 18,000*2/6 = 6,000 14,447.66*2/6 = 4,815.89 6,000-4,815.89= 1,184.11 Or 3,552.34 *2/6 = 1,184.11 481,588.61-1,184.11= 480,404.5 450,000*1.02+6,000 = 465000 Interest Revenue 1,184.11 Available for sale securities 1,184.11 Cash 465,000 Loss 21,404.5 Interest Revenue 6,000 Available for sale securities 480,404.5 Page 2...
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