Suppose that today’s date is April 15. A bond with a 7.5% coupon paid semiannually every January 15 and July 15 is quoted as selling at an ask price of 101.31. If you buy the bond from a dealer today, what price will you pay for it?

Part 1

Debit : Depreciation Expense $11,200

Credit : Accumulated Depreciation $11,200

Part 2

Debit : Cash $72,000

Debit : Accumulated Depreciation $88,000

Debit : P & L $15,600

Credit : Cost $175,600

Part 3

Debit : Cash $97,000

Debit : Accumulated Depreciation $88,000

Credit : P & L $9,400

Credit : Cost $175,600

Explanation:

Depreciation = (Cost - Residual Value) / Useful Life

Annual Depreciation = $19,200

to update depreciation in 2021 = $11,200

Accumulated Depreciation = $88,000