On July 1, 2024, Monty Corporation, a private company, purchased $369,600 of six-year, 5% Star Corporation bonds for $390,000. The bonds pay interest each June 30. The bonds were purchased to earn interest and the market interest rate at the time of purchase was 4%. The company uses the effective-interest method to amortize any premium or discount on debt security investments. Prepare the required journal entries on July 1 and December 31, 2024, and June 30, 2025. (Record entries in the order displayed in the problem statement. 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. List all debit entries before credit entries.) Date 2024 July 1 Dec. 31 2025 June 30 Account Titles and Explanation Investments at Amortized Cost Cash Interest Receivable Investments at Amortized Cost Interest Revenue Cash Investments at Amortized Cost Interest Revenue Debit 390,000 1000 Credit 390,000 700 701

On July 1, 2024, Monty Corporation, a private company, purchased $369,600 of six-year, 5% Star Corporation bonds for $390,000. The bonds pay interest each June 30. The bonds were purchased to earn interest and the market interest rate at the time of purchase was 4%. The company uses the effective-interest method to amortize any premium or discount on debt security investments. Prepare the required journal entries on July 1 and December 31, 2024, and June 30, 2025. (Record entries in the order displayed in the problem statement. 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. List all debit entries before credit entries.) Date 2024 July 1 Dec. 31 2025 June 30 Account Titles and Explanation Investments at Amortized Cost Cash Interest Receivable Investments at Amortized Cost Interest Revenue Cash Investments at Amortized Cost Interest Revenue Debit 390,000 1000 Credit 390,000 700 701

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

ChapterMB: Model-building Problems

Section: Chapter Questions

Problem 13M

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