On January 1, 2022, Bramble and Lois Company purchased 12% bonds having a maturity value of $234,000 for $251,740.88. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2022, and mature on January 1, 2027, with interest receivable on December 31 of each year. Bramble and Lois Company uses the effective interest method to allocate unamortized discount or premium. The bonds are carried at FV-OCI. The fair value of the bonds at December 31 of each year-end is as follows: 2022 $250,000 2023 - Your answer is partially correct. Prepare the journal entries to record the recognition of fair value for 2023 and assuming the investment is sold for $241,000 on December 31, 2023, reclassifying any accumulated holding gains or losses to net income. (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 O for the amounts. List all debit entries before credit entries. Round answers to 2 decimal places, e.g. 52.75.) $241,000 Date Account Titles and Explanation Dec. 31 Dec. 31 Dec. 31 Unrealized Gain or Loss FV-OCI Investments (To adjust to fair value at date of disposal) Cash FV-OCI Investments (To record disposal) Loss on Sale of Investments Unrealized Gain or Loss - OCI (To reclassify holding loss) Debit Credit
On January 1, 2022, Bramble and Lois Company purchased 12% bonds having a maturity value of $234,000 for $251,740.88. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2022, and mature on January 1, 2027, with interest receivable on December 31 of each year. Bramble and Lois Company uses the effective interest method to allocate unamortized discount or premium. The bonds are carried at FV-OCI. The fair value of the bonds at December 31 of each year-end is as follows: 2022 $250,000 2023 - Your answer is partially correct. Prepare the journal entries to record the recognition of fair value for 2023 and assuming the investment is sold for $241,000 on December 31, 2023, reclassifying any accumulated holding gains or losses to net income. (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 O for the amounts. List all debit entries before credit entries. Round answers to 2 decimal places, e.g. 52.75.) $241,000 Date Account Titles and Explanation Dec. 31 Dec. 31 Dec. 31 Unrealized Gain or Loss FV-OCI Investments (To adjust to fair value at date of disposal) Cash FV-OCI Investments (To record disposal) Loss on Sale of Investments Unrealized Gain or Loss - OCI (To reclassify holding loss) Debit Credit
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
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 16E
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Transcribed Image Text:On January 1, 2022, Bramble and Lois Company purchased 12% bonds having a maturity value of $234,000 for $251,740.88. The
bonds provide the bondholders with a 10% yield. They are dated January 1, 2022, and mature on January 1, 2027, with interest
receivable on December 31 of each year. Bramble and Lois Company uses the effective interest method to allocate unamortized
discount or premium. The bonds are carried at FV-OCI. The fair value of the bonds at December 31 of each year-end is as follows:
2022 $250,000
$241,000
2023
Your answer is partially correct.
Prepare the journal entries to record the recognition of fair value for 2023 and assuming the investment is sold for $241,000 on
December 31, 2023, reclassifying any accumulated holding gains or losses to net income. (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 O for the amounts. List all debit entries before credit entries. Round answers to 2 decimal
places, e.g. 52.75.)
Date
Dec. 31
Dec. 31
Dec. 31
Account Titles and Explanation
Unrealized Gain or Loss
FV-OCI Investments
(To adjust to fair value at date of disposal)
Cash
FV-OCI Investments
(To record disposal)
Loss on Sale of Investments
Unrealized Gain or Loss - OCI
(To reclassify holding loss)
Debit
Credit
[[
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