11. Adam Corporation purchased debt securities during 2021 and classified them as securities available for sale. As a result, how much gain will be reported by Adam Corporation in the Decem ber 31, 2021, incom e statement relative to the portfolio? Security Cost Fair Value - 12/31/2021 A 45,500 50,100 77,000 44,500 B 84,000 33,200 a) $0 b) $8,900 c) $15,900 d) None of the above

11. Adam Corporation purchased debt securities during 2021 and classified them as securities available for sale. As a result, how much gain will be reported by Adam Corporation in the Decem ber 31, 2021, incom e statement relative to the portfolio? Security Cost Fair Value - 12/31/2021 A 45,500 50,100 77,000 44,500 B 84,000 33,200 a) $0 b) $8,900 c) $15,900 d) None of the above

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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H1.
18 A company issues P5,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2022. Interest is paid on June 30 and December 31. The proceeds from the bonds are P4,901,036. Using effective-interest amortization, what will the carrying value of the bonds be on the December 31, 2022 statement of financial position? 4,903,160.00 4903160 4,903,160 4903160
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20.Investments in debt securities are classified into the following categories according to management's intention: Select one: a."To hold until maturity", "available for sale" and "to trade". b. "To retain until maturity" and "to negotiate" c. All are classified as "to hold until maturity". d. "To retain until maturity" and "Available for sale".
On 1 July 2021, Jill Ltd acquired some corporate bonds issued by Soy Ltd • These bonds cost $1 038 870. They had a ‘face value’ of $1 million and offered a coupon rate of 10 per cent paid annually ($100 000 per year, paid on 30 June). The bonds would repay the principal of $1 million on 30 June 2026 • At the time the market only required a rate of return on 9 per cent on such bonds • Jill Ltd operates within a business model where government bonds are held in order to collect contractual cash flows and there is no intention to trade them • Assume that there were no direct costs associated with acquiring the bonds Based on the above information, calculate the amortised cost of the bonds as at30 June 2022, 2023, 2024, 2025 and 2026
Ticker Services began operations in Year 1 and holds long-term investments in available-for-sale debt securities. The year-end cost and fair values for its portfolio of these investments follow. Portfolio of Available-for-Sale Securities December 31, Year 1 December 31, Year 2 Cost $ 13,000 20,000 23,000 16,500 December 31, Year 3 December 31, Year 4 Complete this question by entering your answers in the tabs below. Prepare journal entries to record each year-end fair value adjustment for these securities. Adjustment General Journal Calculation Calculation adjustment required to fair value adjustment. 12/31/Year 1 Existing balance in Fair Value Adjustment-AFS (LT) Required balance in Fair Value Adjustment-AFS (LT) Adjustment required to Fair Value Adjustment-AFS (LT) 12/31/Year 2 Existing balance in Fair Value Adjustment-AFS (LT) Required balance in Fair Value Adjustment-AFS (LT) Adjustment required to Fair Value Adjustment-AFS (LT) 12/31/Year 3 Existing balance in Fair Value…
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Problem 5-9 (AFCPA Adapted) Blue Company reported the following financial liabilities on December 31, 2020: 9% debentures, callable in 2021, due in 2022 11% collateral trust bonds, convertible into share capital beginning in 2021, due in 2022 10% debentures, P300,000 maturing annually 3,500,000 3,000,000 1,500,000 What is the total amount of term bonds? 3,000,000 b. a. 3,500,000 5,000,000 d. с. 6,500,000
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