AKUNTANSI INTERMEDIATE

Abdul Aziz Limonu

Agung Wicaksono
Joel Bogar
Constantinopel Robot
Taufiqurrahman azis
E17-3 (DEBT INVESTMENT)
 On January 1, 2015, Roosevelt Company purchased 12% bonds having a maturity Value
of $500,000 for $537,907.40 . The bonds provide the bondholders with a 10% yield. They
are dated January 1, 2015, and mature January 1, 2020, with interest receivable
December 31 of each year. Roosevelt business model is to hold these bonds to collect
contractual cash flows.

Instructions
a) Prepare the journal entry at the date of the bond purchase
b) Prepare a bond amortization schedule
c) Prepare the journal entry to record the interest received and the amortization for
2015
d) Prepare the journal entry to record the interest received and the amortization for
2016
 JOURNAL ENTRY AT THE DATE OF THE
BOND PURCHASE

A. Debt Investment 537,907.40

Cash 537,907.40
EFFECTIVE INTEREST REVENUE AND BOND PREMIUM AMORTIZATION
EFFECTIVE INTEREST METHOD
12% BONDS SOLD TO YIELD 10%
Premium Carry amount of
Date Cash Received Interest Revenue
Amortized Bonds
1-1-2015 537.907,40
31-12-2015 60.000 53.790,74 6.209,26 531.698,14
31-12-2016 60.000 53.169,81 6.830,19 524.867,95
31-12-2017 60.000 52.486,80 7.513,20 517.354,75
31-12-2018 60.000 51.735,48 8.264,52 509.090,23
31-12-2010 60.000 50.909,02 9.090,98 500.000

 A. 500.000 X12% = 60.000  C. 60.000 - 53.790,74 = 6.209/,26

 B. 537.907,40 X 10% = 53.790,74  D. 537.907,40 – 6.209,26 = 531.698.64
JOURNAL ENTRY TO RECORD THE INTEREST RECEIVED
AND THE AMORTIZATION FOR 2015

C. Cash 60.000
Interest Revenue 53.790,74
Debt Investmen 6.209,26
JOURNAL ENTRY TO RECORD THE INTEREST RECEIVED
AND THE AMORTIZATION FOR 2016

D. Cash 60.000
Interest Revenue 53.169.81
Debt Investment 6.830,19