On January 1, 2017, Carla Company purchased 11% bonds, having amaturity value of $274,000,...

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On January 1, 2017, Carla Company purchased 11% bonds, having amaturity value of $274,000, for $295,314.87. The bonds provide thebondholders with a 9% yield. They are dated January 1, 2017, andmature January 1, 2022, with interest received on January 1 of eachyear. Carla Company uses the effective-interest method to allocateunamortized discount or premium. The bonds are classified asavailable-for-sale category. The fair value of the bonds atDecember 31 of each year-end is as follows.
2017 $293,000 2020 $284,700
2018 $283,700 2021 $274,000
2019 $282,800
(a) Prepare the journal entry at the date of the bondpurchase.
(b) Prepare the journal entries to record the interest revenue andrecognition of fair value for 2017.
(c) Prepare the journal entry to record the recognition of fairvalue for 2018

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Answer no Date Accounts explanation Debit Credit a January 1 2017 Debt investments 29531487 Cash 29531487 Record purchase of bond b December 31 2017 Cash 274000 11 30140 See Answer

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In: AccountingOn January 1, 2017, Carla Company purchased 11% bonds, having amaturity value of $274,000, for...On January 1, 2017, Carla Company purchased 11% bonds, having amaturity value of $274,000, for $295,314.87. The bonds provide thebondholders with a 9% yield. They are dated January 1, 2017, andmature January 1, 2022, with interest received on January 1 of eachyear. Carla Company uses the effective-interest method to allocateunamortized discount or premium. The bonds are classified asavailable-for-sale category. The fair value of the bonds atDecember 31 of each year-end is as follows.2017$293,0002020$284,7002018$283,7002021$274,0002019$282,800(a)Prepare the journal entry at the date of the bondpurchase.(b)Prepare the journal entries to record the interest revenue andrecognition of fair value for 2017.(c)Prepare the journal entry to record the recognition of fairvalue for 2018

2017	$293,000	2020	$284,700
2018	$283,700	2021	$274,000
2019	$282,800

(a)		Prepare the journal entry at the date of the bondpurchase.
(b)		Prepare the journal entries to record the interest revenue andrecognition of fair value for 2017.
(c)		Prepare the journal entry to record the recognition of fairvalue for 2018