Bray Co. acquired $30,000 of Honey Sales Co.'s 7% bonds, interest payable semiannually, bonds maturing in five years. The bonds were acquired at $32,626, a price to return approximately 5%.;1. Prepare tables to show the periodic adjustments to the investment account and the annual bond earnings, assuming adjustment by each of the following methods: (a) the straight line method and (b) the effective interest method.;2. Assuming the use of the effective interest method prepare journal entries for each company for the first year.
Paper#79472 | Written in 18-Jul-2015Price : $27