on jan 1, 2011 ptx purhased $100,000 of 12% bonds of ptx and paying 105,000.

for 5 years and fair market 10%. Interest is sem

principal $ 100,000 x 0.6139 = $ 61,390

interest $ 6,000 x 7.7217 = $ 46,330.20
Fair value $ 107,720
interest 5%
interest bond discount
date cash received
revenue amortization
1-Jan-11
1-Jul-11 $ 6,000 $ 5,386.01 $ (613.99)
1-Jan-12 $ 6,000 $ 5,355.31 $ (644.69)
1-Jul-12 $ 6,000 $ 5,323.08 $ (676.92)
1-Jan-13 $ 6,000 $ 5,289.23 $ (710.77)
1-Jul-13 $ 6,000 $ 5,253.69 $ (746.31)
1-Jan-14 $ 6,000 $ 5,216.38 $ (783.62)
1-Jul-14 $ 6,000 $ 5,177.19 $ (822.81)
1-Jan-15 $ 6,000 $ 5,136.05 $ (863.95)
1-Jul-15 $ 6,000 $ 5,092.86 $ (907.14)
1-Jan-16 $ 6,000 $ 5,047.50 $ (952.50)
60000 $ 52,277.30 $ (7,722.70)

1 what ater entries on jan 1, 2011

debt investment $ 107,720
cash $ 107,720

2 what are entries in july 1, 2011

cash $ 6,000
debt investment $ (613.99)
interest revenue $ 5,386.01

3 31-Dec-11
interest receivable $ 6,000
debt investmet $ (644.69)
interest revenue $ 5,355.31

4 1-Jan-12
cash $ 6,000
interest receivable $ 6,000

5 prepare statement of financial position (only equity) dec 31, 2011

Statement of financial position

long-term investment
Debt investment $ 106,461.52
 Current assets
interst receivable $ 6,000

Income Statement
other income and expense
interest revenue ($5,368.01 + $5,355.31) $ 10,741.32

6 ptx sells it's investment to ptz on oct 1, 2012 at 97. what are the entries
1-Oct-12
debt investment $ (338.46)
interest revenue $ (338.46)

selling price of bonds

less: Book value of bonds on october 1, 2012:
amotized cost, july 1, 2012 $ 105,784.60
add: discount amortized for the period july 1, 2012
to october 1, 2012 $ (338.46)
Loss on sale of bonds

cash $ 100,000
loss on sale of debt investment $ 8,446.14
interest revenue $ 3,000
debt investment $ 105,446.14

7 assume if the fair value of the debt investment was $102,000 of dec 31, 2013. what are the entries

fair value adjustment december 31, 2013 $ 102,000

amortized cost at december 31, 2013 $ 104,327.52
unrealized holding gain or loss $ (2,327.52)

unrealized holding gain or loss income $ (2,327.52)

securities fair value adjustment $ (2,327.52)

8 assume if the fair value of the debt investment was $99,000 at dec 2014
ptx 12% bonds $ 102,721.09 99000 $ (3,721.09)

securities fai value adjustment $ (3,721.09)

unrelized holding gain or loss income $ (3,721.09)

securities fair value adjustment $ (3,721.09)
ir market 10%. Interest is semiannual

carrying amount of
bond
$ 107,720
$ 107,106.21
$ 106,461.52
$ 105,784.60
$ 105,073.83
$ 104,327.52
$ 103,543.89
$ 102,721.09
$ 101,857.14
$ 100,950.00
$ 99,997.50
 $ 97,000

$ 105,446.14
$ (8,446.14)

e the entries