Prepare the journal and closing entries on the sale of bonds

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Surrey Corporation (Surrey) has a December 31 fiscal year-end. On January 1, 2018, Surrey purchased Aspire Inc. 10% corporate bonds with a maturity value of $500,000. Aspire provide bondholders with a yield of 12% and will mature on December 31, 2024. The bond pays interest on December 31. The bonds had a market value of $460,000 at the year end of 2019. According to Surrey management's intention, the Aspire corporate bonds are available for sale.

Problem a) What is the price of the bond? Show all calculations

Problem b) Complete the amortization schedule for Aspire corporate bonds

Problem c) On Dec 31, 2020, Surrey sold Aspire bonds for $470,000. Prepare the journal and closing entries on the sale of bonds

Problem ?d) Based on question (c), complete the partial Balance Sheet as of Dec 31, 2020.

Reference no: EM132965558

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