In 2017, Bucky Corporation, for the first time, invested some idle funds in a variety of securities classified as available-for-sale, as described below:
The company's year ends on December 31 and the bonds pay interest semiannually on January 1 and July 1.
Required:
Answer each of the following questions about Bucky Corporation's investments:
a.Calculate the balance that should be in Allowance for Change in Fair Value of Investments to properly value the securities in the portfolio at the end of the third quarter, and indicate whether the balance will be a debit or credit balance.
b.What was the amount of the discount or premium involved in the company's purchase of the bonds?
c.Ignoring amortization, how much did Bucky record as Interest Income on the bond investment during the third quarter of 2017?

Question

In 2017, Bucky Corporation, for the first time, invested some idle funds in a variety of securities classified as available-for-sale, as described below: 
 The company's year ends on December 31 and the bonds pay interest semiannually on January 1 and July 1.
Required:
Answer each of the following questions about Bucky Corporation's investments:
 a.Calculate the balance that should be in Allowance for Change in Fair Value of Investments to properly value the securities in the portfolio at the end of the third quarter, and indicate whether the balance will be a debit or credit balance. 
b.What was the amount of the discount or premium involved in the company's purchase of the bonds? 
c.Ignoring amortization, how much did Bucky record as Interest Income on the bond investment during the third quarter of 2017?

Quizplus · Accepted Answer

The Answer of In 2017, Bucky Corporation, for the first time, invested some idle funds in a variety of securities classified as available-for-sale, as described below: 
 The company's year ends on December 31 and the bonds pay interest semiannually on January 1 and July 1.
Required:
Answer each of the following questions about Bucky Corporation's investments:
 a.Calculate the balance that should be in Allowance for Change in Fair Value of Investments to properly value the securities in the portfolio at the end of the third quarter, and indicate whether the balance will be a debit or credit balance. 
b.What was the amount of the discount or premium involved in the company's purchase of the bonds? 
c.Ignoring amortization, how much did Bucky record as Interest Income on the bond investment during the third quarter of 2017?

In 2017, Bucky Corporation, for the First Time, Invested Some