Prepare the journal entry to record xyz payment

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On July 1 2013, Tan Corporation acquired as a long term investment $ 360 million 6% XYZ Bonds dated July 1. 2013. Tan's management has the positive intent and ability to hold the bonds until maturity. The market rate for bonds of similar risk and maturity was 8%. Tan paid $ 300 million for the bonds. Tan will receive interest semiannually on June 30 and December 31. The effective interest rate is being applied throughout.

Problem 1) Prepare the journal entry to record issue of the bonds on July 1 ,2103 by XYZ

Problem 2) Prepare the journal entry to record XYZ payment t of interest on December 31,2013

Problem 3) Prepare the journal entry to record XYZ payment of interest on June 30 ,2014

Problem 4) What will XYZ report in its June 30 ,2014 Balance Sheet (FS item and amount)

Problem 5) What amount will be shown in its June 30 2014 Income Statement -for the period-Q2 FS item and amount

Reference no: EM132671356

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