On January 1, 2020, Teal Company purchased 9% bonds having a maturity value of $370,000, for $400,342.96. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Teal Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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On January 1, 2020, Teal Company purchased 9% bonds having a maturity value of $370,000, for $400,342.96. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Teal Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.

Prepare the journal entry to record the interest revenue and the amortization at December 31, 2021. (Round answers to 2 decimal
places, e.g. 2,525.25. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is
required, select "No Entry" for the account titles and enter O for the amounts.)
Date
Account Titles and Explanation
Debit
Credit
Dec. 31,
2021
Transcribed Image Text:Prepare the journal entry to record the interest revenue and the amortization at December 31, 2021. (Round answers to 2 decimal places, e.g. 2,525.25. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2021
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