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    Maturity+ +P17 1

    Uploaded by

    Cristin Butler Kalb
    The document presents an amortization schedule for bonds purchased by Kathy Baker Company on December 31, 2004 for $108,660 with a 7% interest rate and 5% yield. It shows cash received, interest revenue, and bond premium amortization annually through 2009. The schedule also compares the bonds' amortized cost and fair value from 2005 to 2009. Journal entries are required to record the purchase and related transactions for 2005 and 2007, assuming the bonds are classified as either held-to-maturity or available-for-sale securities.

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    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd

    Maturity+ +P17 1

    Uploaded by

    Cristin Butler Kalb
    739 views4 pages
    The document presents an amortization schedule for bonds purchased by Kathy Baker Company on December 31, 2004 for $108,660 with a 7% interest rate and 5% yield. It shows cash received, interest revenue, and bond premium amortization annually through 2009. The schedule also compares the bonds' amortized cost and fair value from 2005 to 2009. Journal entries are required to record the purchase and related transactions for 2005 and 2007, assuming the bonds are classified as either held-to-maturity or available-for-sale securities.

    Original Title

    Maturity+ +P17 1(1)(1)

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    © Attribution Non-Commercial (BY-NC)

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    The document presents an amortization schedule for bonds purchased by Kathy Baker Company on December 31, 2004 for $108,660 with a 7% interest rate and 5% yield. It shows cash received, interest revenue, and bond premium amortization annually through 2009. The schedule also compares the bonds' amortized cost and fair value from 2005 to 2009. Journal entries are required to record the purchase and related transactions for 2005 and 2007, assuming the bonds are classified as either held-to-maturity or available-for-sale securities.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Download as xls, pdf, or txt
    739 views4 pages

    Maturity+ +P17 1

    Uploaded by

    Cristin Butler Kalb
    The document presents an amortization schedule for bonds purchased by Kathy Baker Company on December 31, 2004 for $108,660 with a 7% interest rate and 5% yield. It shows cash received, interest revenue, and bond premium amortization annually through 2009. The schedule also compares the bonds' amortized cost and fair value from 2005 to 2009. Journal entries are required to record the purchase and related transactions for 2005 and 2007, assuming the bonds are classified as either held-to-maturity or available-for-sale securities.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Download as xls, pdf, or txt
    of 4

    (Debt Securities) Presented below is an amortization schedule related to Kathy Baker Company

    with a 7% interest rate and a 5% yield, purchased on December 31, 2004, for $108,660

    Cash Interest Bond Premium


    Date Received Revenue Amortization
    12/31/2004
    12/31/2005 $7,000 $5,433 $1,567
    12/31/2006 7,000 5,354 1,646
    12/31/2007 7,000 5,272 1,728
    12/31/2008 7,000 5,186 1,814
    12/31/2009 7,000 5,095 1,905

    The following schedule presents a comparison of the amortized cost and fair value of the bonds

    12/31/2005 12/31/2006
    Amortized cost $107,093 $105,447
    Fair value $106,500 $107,500

    Instructions

    (a) Prepare the journal entry to record the purchase of these bonds on December 31, 2004, ass
    are classified as held-to-maturity securities.

    Dec. 31, 2004 Held-to-maturity securities


    Cash

    (b) Prepare the journal entry(ies) related to the held-to-maturity bonds for 2005.

    Dec. 31, 2005 Cash


    Held-to-maturity securities
    Interest Revenue

    (c) Prepare the journal entry(ies) related to the held-to-maturity bonds for 2007.

    Dec. 31, 2007 Cash


    Held-to-maturity securities
    Interest Revenue

    (d) Prepare the journal entry(ies) to record the purchase of these bonds, assuming they are clas
    available-for-sale.
    Dec. 31, 2004 Available-for-sale securities
    Cash

    (e) Prepare the journal entry(ies) related to the available-for-sale bonds for 2005.

    Dec. 31, 2005 Cash


    Available-for-sale securities
    Interest Revenue

    Dec. 31, 2005 Unrealized Holding Gain or Loss—Equity


    Securities Fair Value Adjustment (AFS)

    (f) Prepare the journal entry(ies) related to the available-for-sale bonds for 2007.

    Dec. 31, 2007 Cash


    Available-for-sale securities
    Interest Revenue

    Dec. 31, 2007 Securities Fair Value Adjustment (AFS)


    Unrealized Holding Gain or Loss—Equity
    e related to Kathy Baker Company’s 5-year, $100,000 bond
    er 31, 2004, for $108,660

    Carrying Amount
    of Bonds
    $108,660
    107,093
    105,447
    103,719
    101,905
    100,000

    ed cost and fair value of the bonds at year-end.

    12/31/2007 12/31/2008 12/31/2009


    $103,719 $101,905 $100,000
    $105,650 $103,000 $100,000

    bonds on December 31, 2004, assuming the bonds

    108,660
    108,660

    ty bonds for 2005.

    7,000
    1,567
    5,433

    ty bonds for 2007.

    7,000
    1,728
    5,272

    ese bonds, assuming they are classified as


    108,660
    108,660

    sale bonds for 2005.

    7,000
    1,567
    5,433

    593
    593

    ale bonds for 2007.

    7,000
    1,728
    5,272

    1,931
    oss—Equity 1,931

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