Business, 25.02.2020 03:59 ElizabethF

Presented below is an amortization schedule related to Bonita Company’s 5-year, $140,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2018, for $152,123. Date Cash Received Interest Revenue Bond Premium Amortization Carrying Amount of Bonds 12/31/18 $152,123 12/31/19 $9,800 $7,606 $2,194 149,929 12/31/20 9,800 7,496 2,304 147,625 12/31/21 9,800 7,381 2,419 145,206 12/31/22 9,800 7,260 2,540 142,666 12/31/23 9,800 7,134 2,666 140,000 The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end. 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 Amortized cost $149,929 $147,625 $145,206 $142,666 $140,000 Fair value $149,300 $149,800 $147,000 $143,800 $140,000 (a) Prepare the journal entry to record the purchase of these bonds on December 31, 2018, assuming the bonds are classified as held-to-maturity securities. (b) Prepare the journal entry related to the held-to-maturity bonds for 2019. (c) Prepare the journal entry related to the held-to-maturity bonds for 2021. (d) Prepare the journal entry to record the purchase of these bonds, assuming they are classified as available-for-sale. (e) Prepare the journal entries related to the available-for-sale bonds for 2019. (f) Prepare the journal entries related to the available-for-sale bonds for 2021.

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Presented below is an amortization schedule related to Bonita Company’s 5-year, $140,000 bond with a...

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