Question

On January 1, 2X13, Soothing Massage Company acquired, as a long-term investment, 20 bonds with a...

On January 1, 2X13, Soothing Massage Company acquired, as a long-term investment, 20 bonds with a face value of $1,000 each. The bonds have a 10-year life, a 10% coupon rate, and pay interest semi-annually every June 30 and December 31. What is the journal entry to be made by Soothing Massage Company on January 1, 2X13, if the bonds were purchased at a price to yield 12%?

A) Investment in Bonds          9,543.40

        Cash                                                              9,543.40

B) Investment in Bonds       11,037.28

        Cash                                                            11,037.28

C) Investment in Bonds       17,705.90

        Cash                                                             17,705.90

D) Investment in Bonds       20,000.00

        Cash                                                           20,000.00

E) Investment in Bonds         22,492.64

        Cash                                                            22,492.64

Note: Please show the math to the answer.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Question 1: Mills Corporation acquired as a long-term investment $240 million of 8% bonds, dated July...
Question 1: Mills Corporation acquired as a long-term investment $240 million of 8% bonds, dated July 1, on July 1, 2021. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Mills paid $280.0 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the...
Tanner-UNF Corporation acquired as a long-term investment $360 million of 8.0% bonds, dated July 1, on...
Tanner-UNF Corporation acquired as a long-term investment $360 million of 8.0% bonds, dated July 1, on July 1, 2021. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $330.0 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at...
Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on...
Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management is holding the bonds in its trading portfolio. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was...
Tanner-UNF Corporation acquired as a long-term investment $270 million of 8% bonds, dated July 1, on...
Tanner-UNF Corporation acquired as a long-term investment $270 million of 8% bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $230 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management is holding the bonds in its trading portfolio. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was...
Mills Corporation acquired as a long-term investment $240 million of 7% bonds, dated July 1, on...
Mills Corporation acquired as a long-term investment $240 million of 7% bonds, dated July 1, on July 1, 2021. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 5% for bonds of similar risk and maturity. Mills paid $280.0 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at...
Mills Corporation acquired as a long-term investment $230 million of 8% bonds, dated July 1, on...
Mills Corporation acquired as a long-term investment $230 million of 8% bonds, dated July 1, on July 1, 2018. Company management has positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Mills paid $260.0 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December...
Tanner-UNF Corporation acquired as a long-term investment $235 million of 8% bonds, dated July 1, on...
Tanner-UNF Corporation acquired as a long-term investment $235 million of 8% bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management has classified the bonds as available-for-sale investments. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $215...
Tanner-UNF Corporation acquired as a long-term investment $235 million of 8% bonds, dated July 1, on...
Tanner-UNF Corporation acquired as a long-term investment $235 million of 8% bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management has classified the bonds as available-for-sale investments. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $215...
Mills Corporation acquired as a long-term investment $300 million of 6% bonds, dated July 1, on...
Mills Corporation acquired as a long-term investment $300 million of 6% bonds, dated July 1, on July 1, 2021. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 4% for bonds of similar risk and maturity. Mills paid $350 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was...
Tanner-UNF Corporation acquired as a long-term investment $350 million of 7.0% bonds, dated July 1, on...
Tanner-UNF Corporation acquired as a long-term investment $350 million of 7.0% bonds, dated July 1, on July 1, 2018. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $320.0 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at...