90.2K

Verified Solution

Link Copied!

On January $1,2025,$ Bonita Company purchased $10\%$ bonds having a maturity value of $$380,000$ for $$410,343\mathrm{.}38.$ The bonds provide

the bondholders with a $8\%$ yield. They are dated January $1,2025,$ and mature January $1,2030,$ with interest received on January $1$ of

each year. Bonita Company uses the effective$-$interest method to allocate unamortized discount or premium. The bonds are classified

in the held$-$to$-$maturity category.

$($a$)$

Your answer is correct.

Prepare the journal entry at the date of the bond purchase. $($List debit entry before credit entry. Credit account titles are automatically

indented when amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the

amounts. Round answers to $2$ decimal places, e$.$g$.1,225\mathrm{.}25.)$

Date

Account Titles and Explanation

Debt Investments

Jan. $1,$

$2025$

Debit

Credit

Prepare a bond amortization schedule. $($Round answers to $2$ decimal places, e$.$g$.1,225\mathrm{.}25.)$

Schedule of Interest Revenue and Bond Premium Amortization

Effective$-$Interest Method

$10\%$ Bonds Sold to Yield $8\%$

Cash

Interest

Premium

$410,343\mathrm{.}38$

Please don't give me Chatgpt answers. It ends with the carrying amount of bonds on the picture for $2030-380,000\mathrm{.}00.$ If you give me solution that doesn't end with the number $380,000\mathrm{.}00$ as a carrying amount of bonds for $2030$ your solution you give to me is incorrect.

Answer & Explanation Solved by verified expert

See Answer