On January 1, 2020 a company purchases bonds as an investment. The company does not have the intent or ability to hold the bonds to maturity and is not in the business of trading investment securities. The bonds have a face value of $150,000, a stated rate of 8.0% and were purchased for $145,000. Interest is payable semiannually on June 30 and December 31 and the bonds mature on December 31, 2024. The company uses the straight line method to amortize any related premium or discount. On December 31, 2020 the bonds have a fair value of $148,000. The bonds are sold on July 1, 2021 for $149,000 (the interest payment received on June 30, 2021 was properly recorded). Required: Provide the journal entries for: acquisition, the first interest payment, the year-end adjustment at 12/31/20, and for the sale on 7/1/21.
On January 1, 2020 a company purchases bonds as an investment. The company does not have the intent or ability to hold the bonds to maturity and is not in the business of trading investment securities. The bonds have a face value of $150,000, a stated rate of 8.0% and were purchased for $145,000. Interest is payable semiannually on June 30 and December 31 and the bonds mature on December 31, 2024. The company uses the
Required: Provide the
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