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Crown Point Ltd. purchased $1,085,000 of 10-year, 4% bonds on July 1, 2018, at 108.3...

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Accounting

Crown Point Ltd. purchased $1,085,000 of 10-year, 4% bonds on July 1, 2018, at 108.3 (this means 108.3% of maturity value). Interest is received semi-annually on January 1 and July 1. The bonds were trading at 107 at December 31, 2018. Crown Point intends to trade the bonds in the near future and is using the fair value through profit or loss model.

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(b) Record any required adjusting journal entries at December 31. (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.) Date Account Titles and Explanation Debit Credit Dec. 31 To accrue interest) Dec. 31 To record adjustment to fair value)

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