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What is correct journal entries to record interest revenue

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Reference no: EM133062027

Question 1 - BKK plus bought 3-year $50,000 of 6% bonds on January 1, 2023, due on January 1, 2027 from Butterfly with interest payable each July 1 and January 1. BKK's intention to manage the bonds is to hold for collecting cash flow. The fair value of Butterfly's 6% bonds is 47,500 on December 31, 2023.

Date

Interest received

Interest income

Changes in bonds value

Carrying value

1/1/2023

47,617

 

 

 

1/7/2023

3,000

3,333

333

47,950

1/1/2024

3,000

3,356

356

48,306

1/7/2024

3,000

3,381

381

48,688

1/1/2025

3,000

3,408

408

49,096

1/7/2025

3,000

3,437

437

49,533

1/1/2026

3,000

3,467

467

50,000

What is the correct journal entries to record interest revenue on July 1, 2023?

a. Debit Cash 3,333

b. Credit Debt investment 333

c. Credit Interest revenue 3,000

d. Debit Debt investment 333

Question 2 - Debt investment presented on BKK's Financial Position as of December 31, 2023 will be (Round to the nearest dollar, No comma ",", No dollar sign "tiny_mce_markerquot;, No decimal "0.00" in your answers).

Question 3 - BKK plus bought 3-year $50,000 of 6% bonds on January 1, 2023, due on January 1, 2027 from Butterfly with interest payable each July 1 and January 1. BKK's intention to manage the bonds is to hold for collecting cash flow and sell. The fair value of Butterfly's 6% bonds is 47,500 on December 31, 2025.

Date

Interest received

Interest income

Changes in bonds value

Carrying value

1/1/2023

47,617

 

 

 

1/7/2023

3,000

3,333

333

47,950

1/1/2024

3,000

3,356

356

48,306

1/7/2024

3,000

3,381

381

48,688

1/1/2025

3,000

3,408

408

49,096

1/7/2025

3,000

3,437

437

49,533

1/1/2026

3,000

3,467

467

50,000

Debt investment presented on BKK's Financial Position as of December 31, 2023 will be (Round to the nearest dollar, No comma ",", No dollar sign "tiny_mce_markerquot;, No decimal "0.00" in your answers)

Question 4 - (T/F) Unrealized gain or loss on equity non-trading investment will be reported in net income.

Reference no: EM133062027

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