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Prepare the journal entry to record the purchase of bonds

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Reference no: EM132506658

Presented below is an amortization schedule related to Spangler Company's 5-year, $100,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2008, for $108,660.

The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end.

Instructions

Question (a) Prepare the journal entry to record the purchase of these bonds on December 31, 2008, assuming the bonds are classified as held-to-maturity securities.

Question (b) Prepare the journal entry(ies) related to the held-to-maturity bonds for 2009.

Question (c) Prepare the journal entry(ies) related to the held-to-maturity bonds for 2011.

Question (d) Prepare the journal entry(ies) to record the purchase of these bonds, assuming they are classified as available-for-sale.

Question (e) Prepare the journal entry(ies) related to the available-for-sale bonds for 2009.

Question (f) Prepare the journal entry(ies) related to the available-for-sale bonds for 2011.

Reference no: EM132506658

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