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CHAPTER 17
INVESTMENTS
Instructions
a) Prepare a bond amortization schedule through 2019.
b) Prepare the journal entry at the date of the bond purchase.
c) Prepare the journal entry to record the interest received and the amortization for 2017.
d) Prepare any entries necessary at December 31, 2017, assuming the fair value of the
bonds is $860,000.
e) Prepare any entries necessary at December 31, 2018, assuming the fair value of the
bonds is $840,000.
f) Prepare any entries necessary at March 1, 2019, if Ellison sold the Watson bonds for
$850,000.
Instructions
a) Prepare a bond amortization schedule through 2018.
b) Prepare the journal entry at the date of the bond purchase.
c) Prepare the journal entry to record the interest received and the amortization for 2017
d) Prepare the journal entry to record the interest received on January 1, 2018
e) Prepare the journal entry if the bonds are sold on October 1, 2018 for $427,000 plus
accrued interest.
The following schedule presents a comparison of the amortized cost and fair value of the bonds
at year-end:
Instructions
Assuming the bonds classified as amortised cost.
a. Prepare the journal entry to record the purchase of these bonds on December 31, 2017
b. Prepare the journal entry(ies) for 2018.
c. Prepare the journal entry(ies) for 2020.