# Investment Bonds Accounting - Excel

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"Investment Bonds Accounting - Excel"

```					                                                                                 I-09.02

Season Corporation had excess cash on hand on January 1, 20X1, and invested in three
separate bond issues on that date. Each bond investment had a maturity date of December
31, 20X6, and a maturity value of \$100,000. The bond issues each pay interest on June 30
and December 31 of each year, and it is intended that these investments be held to maturity.

Spring Company bonds were purchased at par and pay 7% annual interest.
Summer Company bonds were purchased for \$95,168.33 and pay 6% annual interest.
Fall Company bonds were purchased for \$104,831.67 and pay 8% annual interest.

(a) Prepare a table showing the accounting implications for the Spring Company bonds.
Include columns for the date, cash flows, amount of interest income to record on each
payment date, and the resulting bond investment account balance (the blank
worksheets should be helpful in allowing you to complete this problem expeditiously).
(b) Prepare a table showing the accounting implications for the Summer Company bonds.
Include columns for the date, cash flows, amount of interest income to record on each
payment date, discount amortization, and the resulting bond investment account
balance (the blank worksheets should be helpful in allowing you to complete this
problem expeditiously).
(c) Prepare a table showing the accounting implications for the Fall Company bonds.
Include columns for the date, cash flows, amount of interest income to record on each
payment date, premium amortization, and the resulting bond investment account
balance (the blank worksheets should be helpful in allowing you to complete this
problem expeditiously).
(d) Examine the interest rates, and comment on why some bonds were available for
purchase at par, while others involved a discount or premium.
Name:
I-09.02
Date:                  Section:

(a)
Interest   Investment in
1-1-X1
6-30-X1
12-31-X1
6-30-X2
12-31-X2
6-30-X3
12-31-X3
6-30-X4
12-31-X4
6-30-X5
12-31-X5
6-30-X6
12-31-X6
12-31-X6

2 of 4
Name:
I-09.02
Date:                  Section:

(b)
Interest    Discount      Investment in
Date     Cash Received   Income     Amortization      Bonds
1-1-X1
6-30-X1
12-31-X1
6-30-X2
12-31-X2
6-30-X3
12-31-X3
6-30-X4
12-31-X4
6-30-X5
12-31-X5
6-30-X6
12-31-X6
12-31-X6

3 of 4
Name:
I-09.02
Date:                  Section:

(c)
Date     Cash Received   Income     Amortization      Bonds
1-1-X1
6-30-X1
12-31-X1
6-30-X2
12-31-X2
6-30-X3
12-31-X3
6-30-X4
12-31-X4
6-30-X5
12-31-X5
6-30-X6
12-31/X6
12-31-X6

(d)

4 of 4

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Description: Investment Bonds Accounting document sample