Tudor Company acquired $500,000 of Carr Corporation bonds for $487,706.69 on January 1, 2018. The bonds...

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Accounting

Tudor Company acquired $500,000 of Carr Corporation bonds for$487,706.69 on January 1, 2018. The bonds carry an 11% statedinterest rate, pay interest semiannually on January 1 and July 1,were issued to yield 12%, and are due January 1, 2021.
Required:
1. Prepare an investment interest income and discount amortizationschedule using the:
a. straight-line method
b. effective interest method
2. Prepare the July 1, 2020, journal entries to record theinterest income under both methods.
Prepare an investment interest income and discount amortizationschedule using the straight-line method. AdditionalInstructions
TUDOR COMPANY
Bond Investment Interest Income and Discount AmortizationSchedule
Straight-Line Method
1
Date
Cash Debit
Investment in Debt Securities Debit
Interest Income Credit
Carrying Value of Debt Securities
2
01/01/18
3
07/01/18
4
01/01/19
5
07/01/19
6
01/01/20
7
07/01/20
8
01/01/21
This is the only one I am having trouble with. Its the preparingthe investment income and discount amortization schedule usingstraight-line method.

Answer & Explanation Solved by verified expert

4.3 Ratings (928 Votes)

1 a Straightline method Face value 50000000 Issue price 48770669 Total discount 1229331 Semi annual amortization 204889 Date Cash Debit Investment in Debit Interest Income credit Carrying value of security 112018 48770669 172018 2750000 204889 2954889 See Answer

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