On January 1, 2020, Swifty Company purchased 12% bonds having amaturity value of $230,000, for $247,437.40. The bonds provide thebondholders with a 10% yield. They are dated January 1, 2020, andmature January 1, 2025, with interest received on January 1 of eachyear. Swifty Company uses the effective-interest method to allocateunamortized discount or premium. The bonds are classified in theheld-to-maturity category.
Prepare the journal entry at the date of the bond purchase.(Enter answers to 2 decimal places, e.g.2,525.25. Credit account titles areautomatically indented when amount is entered. Do not indentmanually. If no entry is required, select "No Entry" for theaccount titles and enter 0 for the amounts.)
Date | Account Titles and Explanation | Debit | Credit |
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Jan 01, 2020
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Prepare a bond amortization schedule. (Round answersto 2 decimal places, e.g. 2,525.25.)
Prepare a bond amortization schedule. (Round answers to2 decimal places, e.g. 2,525.25.)
Schedule of Interest Revenue and Bond PremiumAmortization
Effective-Interest Method |
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Date
| | Cash
Received | | Interest
Revenue | | Premium
Amortized | | Carrying Amount
of Bonds | |
|---|
1/1/20 | | $ | | $ | | $ | | $ | |
|---|
1/1/21 | | | | | | | | | |
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1/1/22 | | | | | | | | | |
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1/1/23 | | | | | | | | | |
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1/1/24 | | | | | | | | | |
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1/1/25 -------------------------------- Prepare the journal entry to record the interest revenue and theamortization at December 31, 2020. (Round answers to 2decimal places, e.g. 2,525.25. Credit account titles areautomatically indented when amount is entered. Do not indentmanually. If no entry is required, select "No Entry" for theaccount titles and enter 0 for the amounts.) Date Account Title andExplanation Debit Credit | | | |
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Dec. 31, 2020 Prepare the journal entry to record the interest revenue and theamortization at December 31, 2021. (Round answers to 2decimal places, e.g. 2,525.25. Credit account titles areautomatically indented when amount is entered. Do not indentmanually. If no entry is required, select "No Entry" for theaccount titles and enter 0 for the amounts.) Date | Account Title and Explanation Debit | | Credit |
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Dec. 31, 2021 | |
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