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Posted by: Homeworkhelp
Price Quoted by Student: $6
Posted On: 2018-01-30 05:05:19
 
Question
On January 1, 2013, Phantom Company acquires $200,000 of Spiderman Products, Inc.
 
E17-5 (Effective-Interest versus Straight-Line Bond Amortization) On January 1, 2013, Phantom Company acquires $200,000 of Spiderman Products, Inc. 9% bonds at a price of $185,589 The interest is payable each December 31, and the bonds mature December 31, 2015. The investment will provide Phantom Company a 12% yield. The bonds are classified as held-to-maturity.
Note: Due to significant digits and rounding, there may be slight differences in values.
Instructions
(a) Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the
     straight-line method.
(b) Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the
     effective-interest method.
(c) Prepare the journal entry for the interest receipt of December 31, 2014, and the discount
    amortization under the straight-line method.
(d) Prepare the journal entry for the interest receipt of December 31, 2014, and the discount
     amortization under the effective-interest method.
TUTORIAL PREVIEW
(a) Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the
     straight-line method.
                     Schedule of Interest Revenue and Bond Discount Amortization Straight-line Method
                                                       9% Bond Purchased to Yield 12%
Date
Cash
Received
Interest
Revenue
Bond
Discount
Amortization
Carrying
Amount
of Bonds
Jan 1, 13
185,589.00
Dec 31, 13
18,000.00
22,803.67
4,803.67
190,392.67
 
File name: E17-5 Phantom Company.xls File type: xls PRICE: $6

Solutions
TUTORIAL PREVIEW (a) Prepare a 3-year schedu
Price $6
Attachment 1: E17-5 Phantom Company.xls
Solution Posted By: Homeworkhelp    Posted on: 30-01-2018