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E17-3B (Entries for Held-to-Maturity Securities) On January 1, 2014, Hummer Company purchased 5% bonds, having a maturity value of $500,000, for $428,938. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2014, and mature Januar

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E17-3B (Entries for Held-to-Maturity Securities) On January 1, 2014, Hummer Company purchased 5% bonds, having a maturity value of $500,000, for $428,938. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2014, and mature January 1, 2024, with interest receivable June 30 and December 31 of each year. Hummer Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.;Instructions;(a) Prepare the journal entry at the date of the bond purchase.;(b) Prepare the first 3 years of a bond amortization schedule.;(c) Prepare the journal entries to record the interest received and the amortization for 2014.

 

Paper#78466 | Written in 18-Jul-2015

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