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Prepare journal entries for all dates

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Reference no: EM131611675

Problem -

The following information relates to the HTM debts securities investments of Kiran Company during 2016:

a. February 1: The company purchased 10% bonds of Tempe Co. having a par value of $100,000 at 98 plus accrued interest. Interest is payable April 1 and October 1. Maturity date is 10/1/17.

b. April 1:  Semiannual interest is received and amortization is updated.

c. July 1:  9% bonds of Flagstaff, Inc. were purchased. These bonds with a par value of $50,000 were purchased at 105 plus accrued interest. Interest dates are April 1 and October 1. Maturity date is 11/1/17.

d. October 1:  Semiannual interest is received and amortization is updated on Tempe bonds.

e. October 1:  Semiannual interest is received and amortization is updated on Flagstaff bonds.

f. December 31:  Interest is accrued and amortization is updated on both investments.

Required: Prepare journal entries for all dates. Present journal entries for the Tempe bonds (a, b, d, f), then journal entries for the Flagstaff bonds (c, e, f). No explanations or supporting computations are required. Use straight-line amortization.

Reference no: EM131611675

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