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Unformatted text preview: 4164.88/2=2082.44 2082.44-2000=82.44 Page 1 1. Investment in debt securities at discount On July 1, 2010, Stine Co. purchased $100,000 of 8% bonds for $97687.4 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. Instructions (a) Prepare the journal entry on July 1, 2010. (b) The bonds are sold on October 1, 2011 at 105 plus accrued interest. Amortization was recorded by the effective interest rate method. Prepare all entries required to properly record the sale.(show the calculation) Cash: 100000*1.05 + 2000= 107000 Available for sale securities : 97997.28+82.44=98079.72 b. Interest Receivable 2000 Available for sale securities 82.44 Interest Revenue 2082.44 Cash 107000 Interest receivable 2000 Available for sale securities 98079.72 Gain on Available for sale securities 6920.28...
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This note was uploaded on 03/27/2012 for the course ACCT 3321 taught by Professor Chambers during the Spring '09 term at Texas A&M University, Corpus Christi.
- Spring '09