Lance Brothers Enterprises acquired $720,000 of 3% bonds, dated July 1, on July 1, 2018, as a long-term investment. Management has the positive intent and ability to hold the bonds until maturity. The market interest rate(yield) was 4% for bonds of similar risk and maturity. Lance Brothers paid $600,000 for the investment in bondsand will receive interest semiannually on June 30 and December 31. Prepare the journal entries (a) to recordLance Brothers’ investment in the bonds on July 1, 2018, and (b) to record interest on December 31, 2018, at theeffective (market) rate
Lance Brothers Enterprises acquired $720,000 of 3% bonds, dated July 1, on July 1, 2018, as a long-term investment. Management has the positive intent and ability to hold the bonds until maturity. The market interest rate(yield) was 4% for bonds of similar risk and maturity. Lance Brothers paid $600,000 for the investment in bondsand will receive interest semiannually on June 30 and December 31. Prepare the journal entries (a) to recordLance Brothers’ investment in the bonds on July 1, 2018, and (b) to record interest on December 31, 2018, at theeffective (market) rate
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 1RE
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Lance Brothers Enterprises acquired $720,000 of 3% bonds, dated July 1, on July 1, 2018, as a long-term investment. Management has the positive intent and ability to hold the bonds until maturity. The market interest rate
(yield) was 4% for bonds of similar risk and maturity. Lance Brothers paid $600,000 for the investment in bonds
and will receive interest semiannually on June 30 and December 31. Prepare the
Lance Brothers’ investment in the bonds on July 1, 2018, and (b) to record interest on December 31, 2018, at the
effective (market) rate
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