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Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng
Edition 11ISBN: 978-0538480284Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng
Edition 11ISBN: 978-0538480284 Exercise 10
VHWO, journal entries. Record the following events of Mayo Health Clinic, a VHWO:
1. In her will, a leading citizen left a bequest of $400,000 to the clinic. Stipulations were that the amount was to become the corpus of a permanent endowment. Any income received would be used first to cover any loss of principal, with the remaining revenue to be used for an educational program on mental problems. The total amount was received and invested in 10% municipal bonds purchased at face value on an interest date.
2. Three months later, half of the bond investment was sold at 101, plus $5,000 of accrued interest.
3. The remaining endowment bond investments earned $15,000.
4. At year-end, the remaining endowment bond investments have a fair value of $207,000.
1. In her will, a leading citizen left a bequest of $400,000 to the clinic. Stipulations were that the amount was to become the corpus of a permanent endowment. Any income received would be used first to cover any loss of principal, with the remaining revenue to be used for an educational program on mental problems. The total amount was received and invested in 10% municipal bonds purchased at face value on an interest date.
2. Three months later, half of the bond investment was sold at 101, plus $5,000 of accrued interest.
3. The remaining endowment bond investments earned $15,000.
4. At year-end, the remaining endowment bond investments have a fair value of $207,000.
Explanation
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• Journal entry for investment in 10% bo...
Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng
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