NeW lab Search w workdaycccis Calculator Purchase, Premium Amortization, and Sal

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NeW lab Search w workdaycccis Calculator Purchase, Premium Amortization, and Sale of Bond Investment Chart of Accounts General Joumal Next Level Instructions Glover Corporation purchased bonds with a face value of S300,000 for S307, 49334 on January 1, 2018. The bonds carry a tace tale of tie est r 12% pay merest and December 31, were purchased to be held to maturity are due December 31, 2020, and were purchased to yield 11% On Jauary 1 2019 n e e plation of, ma were sold for $300,000 Glover uses the effective interest method a quien i e b de Required: 1. Prepare journal entries to record the purchase of the bonds, the first two interest receipts, and the sale of the bonds 2. Next Level Which of the folowing is an ecceptable reason for a company to sell a held-to-maturity debt security prior to its matunity? Previous ed All work saved

Explanation / Answer

Solution:

Preparing Journal Entries to Record the Purchase of the Bonds, the First Two Interest Recepits and the Sale of Bonds:

GLOVER CORPORATION

Bond Investment Interest Revenue

and Premium Amortization Schedule (Partial)

Date General Journal Debit Credit Jan 1, 2018 Investment in Held-to-Maturity Debt Securities $307,493.34 Cash $307,493.34

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