Business, 29.10.2021 23:50 Babygirljay1540

On January 1, 2020, Hi and Lois Company purchased 12% bonds, having a maturity value of $300,000 for $322,744.44. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Hi and Lois Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows: 2020 $320,500 2023 $310,000
2021 $309,000 2024 $300,000
2022 $308,000

Required:
a. Prepare the journal entry at the date of the bond purchase.
b. Prepare a bond amortization schedule.
c. Prepare the journal entry to record the interest revenue and the amortization at December 31, 2020.
d. Prepare the journal entry to record the interest revenue and the amortization at December 31, 2021.

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On January 1, 2020, Hi and Lois Company purchased 12% bonds, having a maturity value of $300,000 for...

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