Prepare the journal entries on december 31, 2019, to record

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Reference no: EM133432664

Question: On December 31, 2018, Leslie Company held an investment in bonds of Kaufmann Company which it categorized as being held to maturity. At that time, the 8%, $200,000 face value bonds had a carrying value of $214,047.12 and were being amortized using the effective interest method based on a market rate of 7%. Interest on these bonds is paid annually each December 31. On December 31, 2019, after recording the interest earned, Leslie decided to reclassify the Kaufmann bonds to its available-for-sale category in anticipation of a major restructuring. At that time, the ending quoted market price for the bonds was $210,000.

Required: Prepare the journal entries on December 31, 2019, to record the interest earned and the reclassification.

Reference no: EM133432664

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