Asked by Samantha Moyer on Jul 26, 2024
Verified
On December 31, 2010, the England Company held 8%, $200, 000 bonds of Marshall Corporation that were purchased at an amount to yield 7%.The bonds were classified as held to maturity and had a carrying value of $208, 640 on December 31, 2010.Interest on the bonds is paid June 30 and December 31.On July 1, 2011, England decided to reclassify the bonds as available for sale.The market price of the bonds at that date was $204, 000.
Required:
Prepare the journal entries required on June 30 and July 1 of 2011 to fully account for the bond investment.
Held to Maturity
A classification of debt securities that a company intends and is able to hold until they mature.
Market Price
The current price at which an asset or service can be bought or sold.
Journal Entries
Records of financial transactions in the accounting system, showing the accounts affected and the amounts for each transaction.
- Explain the variations in the fair value of investments and their consequences on the financial reports.
Verified Answer
RK
Learning Objectives
- Explain the variations in the fair value of investments and their consequences on the financial reports.
Related questions
On January 1, 2010, a Corp ...
Which of the Following Correctly Presents the Entries Made by ...
On January 1, the Valuation Allowance for Available-For-Sale Investments Account ...
During the First Year of Operations, Makala Company Purchased Two ...
Following Are Data for the Trading Securities Held by Lindy ...