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Accounting Homework question help please?


Co. purchased as a long-term investment $75 million of 8% bonds, dated January 1, on January 1, 2006. Management intends to have the investment available for sale when circumstances warrant. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $62 million. Interest is received semiannually on June 30 and December 31. Due to changing market conditions, the fair value of the bonds at December 31, 2006, was $66 million.

3. Prepare the journal entries by Co. to record interest on December 31, 2006 (at the effective rate).
4. At what amount will Co. reported its investment in the December 31, 2006, balance sheet? Prepare entry necessary to achieve this reporting objective.

3. How do they get 3.11 million?
Cash 3,000,000
Discount on Bond investment 110,000
Interest Revenue 3,110,000

4. FV Adjustment ???
Net Unrealized G&L ???

How do u get # here?

I used this site when i needed help. It is a good site for accounting homework help

http://www.accountstutor.4t.com

There is a trusted Indian site by an Indian Professor

http://www.dineshchopra.com

Best of Luck

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