Wednesday 13 November 2019

Robert Company purchased $100,000 of 8 percent bonds of Evergreen Corp. on January 1

Robert Company purchased $100,000 of 8 percent bonds of Evergreen Corp. on January 1, 20x1, at $92,278. The bonds mature January 1, 20x16, and yield 10%. Interest is payable each July 1 and January 1. The market value on December 31, 20x1 was $92,500 and all bonds were sold for $93,300 on January 1, 20x2.  
Required: prepare journal entries on January 1, 20x1, July 1, 20x1, December 31, 20x1 and January 1, 20x2 assuming the bond investment is classified as
(1) Held-to-Maturity
(2) Trading
(3) Available-for-Sale

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