test 2 - Name: __________________________ Test 2 Spring...

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Unformatted text preview: Name: __________________________ Test 2 Spring 2011 Acct 3312 1. On July 1, 2010, Kirmer Corp. purchased $450,000 of 5% bonds, interest payable on January 1 and July 1, for $429,182. The bonds mature on January 1, 2016. Amortization is by the effective interest method. (Assume bonds are available for sale and the effective interest rate at the purchase date was 6%.) Instructions (a) Prepare the entry for the purchase of the investment. Prepare the amortization table for the years 2010 and 2011. (b) The bonds are sold on August 1, 2011 for $425,000 plus accrued interest. Prepare all entries required to properly record the sale. July 1 Investment-available for sale 429182 Cash 429182 Cash Interest Amortization 429182 11250 12875.46 1625.46 430807.5 11250 12924.22 1674.224 432481.7 11250 12974.45 1724.451 434206.1 11250 13026.18 1776.184 435982.3 08/1/11 Interest Rec 1875 Investment 287 Interest Revenue 2162 Cash 426875 Loss 7769 Investment 432769 Interest Receivable 1875 Page 1 2. Penner Builders contracted to build a high-rise for $14,000,000. Construction began in 2....
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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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test 2 - Name: __________________________ Test 2 Spring...

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