| Bonds purchases |
| Cisco Computing invested in $100,000 face amount of 10-year bonds issued by AMD Micro Chip Company on January 1, 20X1. The bonds were purchased at 103, and bear interest at a stated rate of 8% per annum, payable semiannually. The preimum will be amorized on a straight line basis. |
| (a) | Prepare the journal entry to record the initial investment on January, 20X1. |
| (b) | Prepare the journal entry that Devol would record on each interest date. |
| | | | Debit | Credit |
| | a |
| | b |
| | Cisco Computing invested an additional $100,000 face amount of 10-year bonds issued by Waco Micro Chip Company on January 1, 20X1. The bonds were purchased at 95, and bear interest at a stated rate of 7% per annum, payable semiannually. The discount will be amorized on a straight line basis. |
| | (a) | Prepare the journal entry to record the initial investment on January, 20X1. |
| | (b) | Prepare the journal entry that Devol would record on each interest date. |
| | | | Debit | Credit |
| | a |
| | b |
brandon282011
AC216Unit2Assignment3-BondPurchases.xlsx
