Home / Questions / On January 2014 Roosevelt Company purchased 12% bonds having a maturity value of $500000...
On January 1, 2014, Roosevelt Company purchased 12% bonds, having a maturity value of
$500,000, for $537,907.40. The bonds p r ovide the bondholders with a 10% yield. They a r e dated January 1,
2014, and matu r e January 1, 2019, with inte r est r eceivable December 31 of each yea r . Roosevelt’s business
model is to hold these bonds to collect contractual cash flows.
Instructions
(a) Prepare the journal entry at the date of the bond purchase.
(b) P r epa r e a bond amortization schedule.
(c) P r epa r e the journal entry to r eco r d the inte r est r eceived and the amortization for 2014.
(d) P r epa r e the journal entry to r eco r d the inte r est r eceived and the amortization for 2015.
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