4. (16 points) (LO3) Paka Corporation owns an 80% interest in Sandra Company. Paka acquired Sandra's bonds on January 2, 2014. The following information is from the adjusted trial balances at December 31, 2014, at which time the bonds have three years to maturity. The bonds have interest payment dates of January 1 and July 1. Straight-line amortization is used by both companies. Paka Sandra Investment in Sandra Bonds, $100,000 par 98,500 7% Bonds payable, $200,000 Bond premium 200,000 6,000 12,000 Interest expense Interest receivable 7,000 Interest income 7,500 Interest payable 7,000

4. (16 points) (LO3) Paka Corporation owns an 80% interest in Sandra Company. Paka acquired Sandra's bonds on January 2, 2014. The following information is from the adjusted trial balances at December 31, 2014, at which time the bonds have three years to maturity. The bonds have interest payment dates of January 1 and July 1. Straight-line amortization is used by both companies. Paka Sandra Investment in Sandra Bonds, $100,000 par 98,500 7% Bonds payable, $200,000 Bond premium 200,000 6,000 12,000 Interest expense Interest receivable 7,000 Interest income 7,500 Interest payable 7,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Hello, Can you assist with questions attached, thanks much.
uses the effective interest method of amortization. In its December 31, 2003 balance sheet, what amount should York report as investment in bonds? a. 911,300 b. 916,600 c. 953,300 d. 960,600 (AICPA) Use the following information for the next three questions: On Jan. 1, 20x1, Koong Co. acquired 100, P5,000 face amount, 10%, 3-year 'term' bonds of King Co. for P428,567. Koong incurred transaction costs of P25,000 on the acquisition. The effective interest rate adjusted for the transaction costs is 14%. The bonds were quoted at 102 on Dec. 31, 20x2. 2. How much are the interest income in 20x2 and the carrying amount of the bonds on Dec. 31, 20x2 if the bonds are held under a “hold to collect" business model? a. 65,389; 482,455 b. 65,389; 510,000 c. 55,276; 472,834 d. 50,000; 453,567 3. How much are the interest income in 20x2 and the carrying amount of the bonds on Dec. 31, 20x2 if the bonds are held under a “hold to collect and sell" business model? a. 65,389; 482,455 c. 50,000; 428,567…
Please Answer all, thanks
ss.2
please help me to solve this problem and please do not give answer in image formate
On August 1, 2011, Airport Company sold Paxton Company $1,000,000 of 10-year, 6% bonds, dated July 1 at 100 plus accrued interest. On March 1, 2012, Paxton sold half of the bonds for $520,000 plus accrued interest. Present entries to record the following transactions: Paxton Company: (1) Purchase of bonds on August 1, 2011. (2) Receipt of first semiannual interest amount on December 31, 2011. (3) The sale of the bonds on March 1, 2012.
On December 31, 2015, Martin Corp invested in Marlin’s 5-year, $200,000 bond with a 5% interest rate for $191,575. The bond pays semiannual interest on June 30th and December 31st. The fair values of the bonds at the end of 2016~2018 are $194,500, $194,200, and $195,750. Martin sold its investment in Marlin’s bond on July 1, 2019 at 98 ½ (i.e. selling price is = 98.5% of the face value). Assuming the bonds are classified as Trading investment, prepare the journal entries on aforementioned dates.
4. Determine the average stock in a department with annual sales of $2,425,000 and an annual stock turn of 4.1. Round to the nearest dollar.
None
On January 1, 2017, Sarasota Corporation purchased 331 of the $1,000 face value, 9%, 10-year bonds of Walters Inc. The bonds mature on January 1, 2027, and pay interest annually beginning January 1, 2018. Sarasota purchased the bonds to yield 11%. How much did Sarasota pay for the bonds?
38. On October 1, Dennis Company purchased P200,000 face value, 12% bonds at 98 plus accrued interest and brokerage fees and classified them as amortized cost assets. Interest is paid semiannually on January 1 and July 1. Brokerage fees for this transaction were $700. At what amount should this acquisition of bonds be recorded? a. 196,000 b. 196,700 c. 202,000 d. 202,700
During 2023, Culver Inc. purchased 2200, $1000, 7% bonds. The bonds mature on March 1, 2028 and pay interest on March 1 and September 1. The carrying value of the bonds at December 31, 2023 was S 1967500. on September 1, 2024, after the semi-annual interest was received, Brandon sold half of these bonds for $1007000. Culver uses straight-line amortization and has accounted for the bonds under the amortized cost mode.The gain on the sale is $23250 $41850 $0 $4650