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krok68 [10]
3 years ago
9

On January ​1, 2018​, the Cook​'s Restaurant decides to invest in Lake Topsey bonds. The bonds mature on December​ 31, 2021​, an

d pay interest on June 30 and December 31 at 4​% annually. The market rate of interest was 4​% on January​ 1, 2018​, so the $ 140,000 maturity value bonds sold for face value. Cook​'s intends to hold the bonds until December​ 31, 2021.
Journalize the the transaction related to Cook's investment in lake Topsey bond during 2021.
Business
1 answer:
charle [14.2K]3 years ago
3 0

Answer and Explanation:

The Journal Entry is shown below:-

Investment in bonds is at face value, no question about discount or premium.

Investment is rendered from the time the bonds mature before 2023. Hence, it is an investment as Working for Profit "Held until maturity"

Jan 1, 2018

Bonds receivables  Dr, $140,000

      To Cash  $140,000

(Being Investment in bonds is recorded)

30 June 2018

Cash Dr, $2,400

       To interest income $2,400

(Being six months interest received is recorded)

31 Dec 2018

3. Cash Dr, $2,400

       To interest income $2,400

(Being six months interest received is recorded)

Working note:-

Bond Value                         $140,000

Interest rate                          4%  

Interest earned half

yearly, effective rate

(4% × 6 ÷ 12)                            2%

Half Yearly interest amount

($140,000 × 2%)                     $2,800

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The coupons paid by municipal bonds are exempt from federal income tax and from state tax in many states. Therefore, the higher the tax bracket that the investor is in, the more valuable the tax-exempt feature to the investor.

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Use the following information to answer the next two questions: Q14 and Q15. The Cavallas Co. had the following balances in sele
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Answer:

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Explanation:

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The journal entries will be as follows:

<u>Details                                            Dr ($)                 Cr ($)          </u>

Bad debt                                        4,000

Accounts receivable                                                4,000

<u><em>Being a bad written off the accounts receivable                      </em></u>

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The use of government taxes and spending to alter macroeconomic outcomes is known as?
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2 years ago
An appraiser completes an appraisal for a homeowner in preparation for obtaining a loan. The appraiser provides a letter report
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The situation here is that the appraiser is:

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Based on the given question, we can see than when an appraisal is made, the appraisal which is actually a written report that makes an estimate of the present value of a piece of property.

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7.
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Answer:

I think it would be either B or C

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