Prepare an amortization schedule for the bonds

Reference no: EM131884623

Question: Monkey Technology purchased as a long-term investment $800,000 of 8% quoted bonds, dated January 1, on January 1, 2012. The management intent to hold the bonds until maturity. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $660,000. Interest is received semiannually on June 30 and December 31.

Required: 1. Prepare an amortization schedule for the bonds at the effective rate for year 2012 and 2013.

2. Prepare all necessary journal entries in the year 2012.

3. Assume February 1, 2013 the company sells the bonds for $720,000, included interest. Prepare the journal entries on Feb 1, 2013.

Reference no: EM131884623

Questions Cloud

What is the factor of safety : Apply the torque at the center of the middle part where you grip the drill. Fix both the top and the bottom faces. What is the factor of safety?

List and describe the steps to create welded parts : Many weld joints exist. List four of them. How do you decide which weld joint to use? List and describe the steps to create welded parts.

List and describe four methods to create sheet metal parts : What is the difference between an edge flange and a miter flange? List and describe the four methods to create sheet metal parts.

Find out the standard gauges of sheet metal : Find out the standard gauges of sheet metal for different materials and their corresponding thicknesses. For example, Gauge 10 for Aluminum is 3 mm.

Prepare an amortization schedule for the bonds : Monkey Technology purchased as a long-term investment $800,000 of 8% quoted bonds, dated January 1, on January 1, 2012. The management intent to hold the bonds.

What must janet do prior to filing a petition : Under the Bankruptcy Code after the enactment of the 2005 revisions, what must Janet do prior to filing a petition for relief under Chapter 7?

Prepare the journal entries : Merando Company acquires 30 percent of Pau Company's common stock for $200,000 at the beginning of the year but does not gain significant influence over Pau.

What is the primary objective of the equity method : When should an investor not use the equity method for an investment of 21% in another corporation?

Calculate balance of the performance bond account : Assume today's settlement price on a CME EUR futures contract is $1.3140/EUR. You have a short position in one contract.

User Account

All Pages