On July 1, 2020, Riverbed Company purchased $3,840,000 of Duggen Company’s 8% bonds, due on July 1, 2027. The bonds, which pay interest semiannually on January 1 and July 1, were purchased for $3,330,000 to yield 10%. These bonds are classified as available-for sale and they have a fair value at December 31, 2020, of $3,428,300, prepare the journal entry (if any) at December 31, 2020, to record this transaction. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

On July 1, 2020, Riverbed Company purchased $3,840,000 of Duggen Company’s 8% bonds, due on July 1, 2027. The bonds, which pay interest semiannually on January 1 and July 1, were purchased for $3,330,000 to yield 10%. These bonds are classified as available-for sale and they have a fair value at December 31, 2020, of $3,428,300, prepare the journal entry (if any) at December 31, 2020, to record this transaction. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 1MC

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Refer to the information in RE13-5. Assume that on June 30, Aggie received interest on the Smith Corporation bonds. Prepare the June 30 journal entries to record the receipt of the interest. On April 30, 2019, Aggie Corporation purchased Smith Corporation 10%, 5-years bonds with a face value of 12,000 at par plus four months of accrued interest. Prepare the April 30 journal entry to record the purchase of these available-for-sale securities.
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