ABC Company , a holder of P1,000,000 XYZ Company bonds, collected the interest due on March 31, year 1, and then sold the bonds to W, Inc. for P975,000. On that date, XYZ, a 75% owner of W had P1,075,000 carrying amount for the bonds. What was the effect of W's purchase of XYZ's bond on the noncontrolling interest amount reported in XYZ's March 31, year 1 consolidated balance sheet?
Q: On July 1, 2020, an interest date, P1,000,000 of Siomai Company bonds were converted into 20,000 of…
A: Amount to be recognised =Market value of ordinary shares -Carrying amount of bonds
Q: Rell Corporation reports under IFRS No. 9. Rell has an investment in Tirish, Inc. bonds that Rell…
A: 1. Prepare the journal to record the impairment loss for Company R, on December 31, 2018, assuming…
Q: On July 1, 2020, an interest date, P1,000,000 of Siomai Company bonds were converted into 20,000 of…
A: Conversion of bonds refers to the process of exchanging a convertible type of asset or bond into…
Q: On January 1 of the current year, Points Incorporated acquired a $100,000 bond originally issued by…
A: Bonds payable is a form of debt or obligation being incurred in business. There can be long term…
Q: On January 1, 20X1, ABC acquired 5,000 of XYZ’s bonds denominated at P1,000, 12% interest rate, 5…
A: On 01.01.20X1, ABC acquired XYZ bonds = 5000 bonds Par value per bond = P1000 Total bonds acquired =…
Q: On January 1 of the current year, Andy Co. paid $575,000 to purchase two-year, 8%, $625,000 face…
A: Bonds are debt instruments that represent loans made to issuer and issued by the government or…
Q: Landis Company purchased $3,000,000 of 8%, 5-year bonds from Ritter, Inc. on January 1, 2018, with…
A: Other comprehensive income=Fair value of bonds-(Sales value of bonds-Amortized premiums)
Q: od to amortize discount or premium. On Ja Is for $258,816 after receiving interest to m 1/27 - /27 -…
A: Calculate the semiannual interest income using the effective-interest method:The effective interest…
Q: Ivanhoe Company purchased $324000 of bonds for $339000. If Ivanhoe intends to hold the securities to…
A: Bonds are the financial securities issued to raise funds. For the purchaser, it is an investment.…
Q: Sandhill Company purchased $3400000 of 8%, 5-year bonds from Blue, Inc. on January 1, 2021, with…
A: Given, Sales price of bond is $3,490,000 Carrying value of bond is $3,497,440 The computation is…
Q: Tanner-UNF Corporation acquired as an investment $300 million of 6% bonds, dated July 1, on July 1,…
A: Solution 1-3: Journal Entries - Tanner - UNF Corporation Event Date Particulars Debit…
Q: On October 1, 2021, POGI company purchased 4000 of the P1000 face amount, 10% bonds of GANDA Company…
A: The carrying value of a bond means the net amount between the bond's face value plus any…
Q: Presented below are two independent situations: (a)Morten Corporation purchased $480,000 of its…
A: Journal entry is the process of documenting commercial transactions for the first time in the books…
Q: Tanner-UNF Corporation acquired as an investment $240 million of 7% bonds, dated July 1, on July 1,…
A: Journal entries refers to the process of systematic documentation of the financial transactions of a…
Q: Blossom Company purchased $1300000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2021, with…
A: When the sale price of bonds is greater than the book value of the bonds, then it would result in…
Q: On January 1, 2023, Pronghorn Limited pays $105,753 to purchase $110,000 of Chan Corporation 9%…
A: Bonds selling at a price below the face value result in discount. The discount on bonds is amortized…
Q: RebecoCa entity, purch o 'aɔr
A: The bonds were purchased at premium of P 251,880 [3,251,880-3,000,000]. The…
Q: On January 1, 2020, Liam Company purchased bonds with face amount of P10,000,000 for P10,515,000.…
A: Bonds Face amount = P 10000000 Cash paid for bonds = P 10515000 December 31 , 2020 bonds are quoted…
Q: Blossom Company purchased $1180000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2021, with…
A: Bonds refers to the units of corporate debts which are issued by companies and also securitized…
Q: PUP CAF Corporation acquired a 4-year, P3,000,000 par value bonds when the prevailing rate of…
A: Unrealized gain or loss on investment: Investment gains that are not yet realized are gains that…
Q: At April 1, 2021, Candy Company sold the Sugar bonds for $3,090,000. Assuming Candy Company has a…
A: Any change in the value of Available-for-Sale Debt Securities are recorded an gain or loss…
Q: Wildhorse Company purchased $1290000 of 8%, 5-year bonds from Blossom, Inc. on January 1, 2021, with…
A: Workings: Using the effective interest method:
Q: Pharoah Company purchased $3200000 of 9%, 5-year bonds from Wildhorse, Inc. on January 1, 2021, with…
A: The question is based on the concept of Financial Accounting.
Q: Landis Co. purchased €500,000 of 8%, 5-year bonds from Ritter, Inc. on January 1, 2021, with…
A: Bonds are priced by discounting future cash flows. Future cash flows include coupons and par value…
Q: ement: Prepare Journal Entries on June 1 and selling of warrants.
A: Journal entry: Journal entry is the book of original entry where first transactions are recorded in…
Q: On November 1, 2015, Journeyman, LLC purchased 900 of the $1,000 face value, 9% bonds of Celebration…
A: One of the source used by the business entities to raise the funds is issue of bonds. The corporate…
Q: Cullumber Company purchased $3050000 of 9%, 5-year bonds from Vaughn, Inc. on January 1, 2021, with…
A: Bonds can be define as an instrument which most commonly used by corporate entities and government…
Q: Sheridan Company purchased $1250000 of 8%, 5-year bonds from Pina, Inc. on January 1, 2025, with…
A: Interest Expense :Carrying amount on July 1, 2025: $1,299,896 - $4,748 = $1,295,148Interest Expense…
Q: Peter Company purchased bonds at a discount of P5,000,000. Subsequently, Peter sold these bonds at a…
A: Bonds mean an instrument issued by the company acknowledging the debt due from the company to the…
Q: Prepare the journal entry to record the purchase of bonds on January 1. Assume that the bonds are…
A: The financial instrument issued at a premium. In this scenario, the difference between the amount…
Q: On May 1, 20X1, Starlight Company purchased $750,000 of Gazing Corp's 12% bonds at 100 plus accrued…
A: Journal entries shows the recording of the transaction during an accounting year and every…
Q: Crane Company purchased $1190000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2021, with…
A: Sale value of bonds $12,25,900 Carrying value of bonds $12,30,500 Loss on sale of bonds…
ABC Company , a holder of P1,000,000 XYZ Company bonds, collected the interest due on March 31, year 1, and then sold the bonds to W, Inc. for P975,000. On that date, XYZ, a 75% owner of W had P1,075,000 carrying amount for the bonds. What was the effect of W's purchase of XYZ's bond on the noncontrolling interest amount reported in XYZ's March 31, year 1 consolidated balance sheet?
![](/static/compass_v2/shared-icons/check-mark.png)
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- Cullumber Company purchased $3050000 of 9%, 5-year bonds from Vaughn, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The bonds sold for $3173740 at an effective interest rate of 8%. Using the effective-interest method, Cullumber Company decreased the Available-for-Sale Debt Securities account for the Vaughn, Inc. bonds on July 1, 2021 and December 31, 2021 by the amortized premiums of $10720 and $11080, respectively.At April 1, 2022, Cullumber Company sold the Vaughn bonds for $3140000. After accruing for interest, the carrying value of the Vaughn bonds on April 1, 2022 was $3147440. Assuming Cullumber Company has a portfolio of Available-for-Sale Debt Securities, what should Cullumber Company report as a gain or loss on the bonds? $-7440. $-123740. $-21800. $ 0.Pharoah Company purchased $3200000 of 9%, 5-year bonds from Wildhorse, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The bonds sold for $3320740 at an effective interest rate of 8%. Using the effective-interest method, Pharoah Company decreased the Available-for-Sale Debt Securities account for the Wildhorse, Inc. bonds on July 1, 2021 and December 31, 2021 by the amortized premiums of $11020 and $11380, respectively.At April 1, 2022, Pharoah Company sold the Wildhorse bonds for $3290000. After accruing for interest, the carrying value of the Wildhorse bonds on April 1, 2022 was $3297440. Assuming Pharoah Company has a portfolio of Available-for-Sale Debt Securities, what should Pharoah Company report as a gain or loss on the bonds?Wildhorse Company purchased $1290000 of 8%, 5-year bonds from Blossom, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The bonds sold for $1339896 at an effective interest rate of 7%. Using the effective interest method, Wildhorse Company decreased the Available-for-Sale Debt Securities account for the Blossom, Inc. bonds on July 1, 2021 and December 31, 2021 by the amortized premiums of $5148 and $5292, respectively.At December 31, 2021, the fair value of the Blossom, Inc. bonds was $1353000. What should Wildhorse Company report as other comprehensive income and as a separate component of stockholders’ equity? $0 $23544 $10440 $13104
- Crane Company purchased $1190000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The bonds sold for $1239996 at an effective interest rate of 7%. Using the effective interest method, Crane Company decreased the Available-for-Sale Debt Securities account for the Carlin, Inc. bonds on July 1, 2021 and December 31, 2021 by the amortized premiums of $4148 and $4292, respectively.At February 1, 2022, Crane Company sold the Carlin bonds for $1225900. After accruing for interest, the carrying value of the Carlin bonds on February 1, 2022 was $1230500. Assuming Crane Company has a portfolio of available-for-sale debt investments, what should Crane Company report as a gain (or loss) on the bonds? $0. $-14096. $-4600. $-9496.On July 1, 2021, Rebecca Company, a medium-sized entity, purchased P3 million face, 8%, 5-year bonds for P3,251,880. The effective rate o the bon is 6%. The bonds are dated July 1, 2021 and pays interest every June 30. The company has a business model of buying and selling in order to make profits for all debt securities. What is the total interest income to be recognized by Rebecca in its December 31, 2021 profit or loss?Cardinal Company is an 80%- owned subsidiary of Dove Corporation. Cardinal Company issued $100,000 of 8%, 10-year bonds for $96,000 on January 1, 2011. Annual interest is paid on January 1. Dove Corporation purchased the bonds on January 1, 2015, for $101,500. Both companies use the straight-line method to amortize the premium/discount on the bonds. 1. Prepare the eliminations and adjustments that would be made on the December 31, 2015, consolidated worksheet as a result of this purchase. 2. Prepare the eliminations and adjustments that would be made on the December 31, 2016, consolidated worksheet.
- Sandhill Company purchased $3400000 of 8%, 5-year bonds from Blue, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The bonds sold for $3516740 at an effective interest rate of 7%. Using the effective-interest method, Sandhill Company decreased the Available-for-Sale Debt Securities account for the Blue, Inc. bonds on July 1, 2021 and December 31, 2021 by the amortized premiums of $11420 and $11780, respectively.At April 1, 2022, Sandhill Company sold the Blue bonds for $3490000. After accruing for interest, the carrying value of the Blue bonds on April 1, 2022 was $3497440. Assuming Sandhill Company has a portfolio of Available-for-Sale Debt Securities, what should Sandhill Company report as a gain or loss on the bonds? $-23200. $-7440. $ 0. $-116740.Blossom Company purchased $1300000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The bonds sold for $1348896 at an effective interest rate of 7%. Using the effective interest method, Blossom Company decreased the Available-for-Sale Debt Securities account for the Carlin, Inc. bonds on July 1, 2021 and December 31, 2021 by the amortized premiums of $5248 and $5392, respectively.At February 1, 2022, Blossom Company sold the Carlin bonds for $1337000. After accruing for interest, the carrying value of the Carlin bonds on February 1, 2022 was $1340500. Assuming Blossom Company has a portfolio of available-for-sale debt investments, what should Blossom Company report as a gain (or loss) on the bonds? $-8396. $0. $-11896. $-3500.Blossom Company purchased $1180000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The bonds sold for $1230096 at an effective interest rate of 7%. Using the effective interest method, Blossom Company decreased the Available-for-Sale Debt Securities account for the Carlin, Inc. bonds on July 1, 2021 and December 31, 2021 by the amortízed premiums of $4048 and $4192, respectively. At February 1, 2022, Blossom Company sold the Carlin bonds for $1215800. After accruing for interest, the carrying value of the Carlin bonds on February 1, 2022 was $1220500. Assuming Blossom Company has a portfolio of available-for-sale debt investments, what should Blossom Company report as a gain (or loss) on the bonds? $-4700. $0. $-9596. $-14296.
- On January 1, 2023, Pronghorn Limited pays $105,753 to purchase $110,000 of Chan Corporation 9% bonds. The market rate of interest at the time was 10%. Pronghorn accounts for this investment at amortized cost using the effective interest method. The bonds mature on January 1, 2028, and interest is payable each July 1 and January 1. Note that the bond is acquired on an interest payment date and there is therefore no accrued interest for Pronghorn to pay on January 1. Pronghorn has an August 31 year end (a) * Your answer is incorrect. Calculate the amortization of the discount per month using the straight-line method. (Round answer to 2 decimal places, eg 125.55) SUPPORRell Corporation reports under IFRS No. 9. Rell has an investment in Tirish, Inc. bonds that Rell accounts for atamortized cost, given that the bonds pay only interest and principal and Rell’s business purpose is to hold the bondsto maturity. Rell purchased the bonds for €10,000,000. As of December 31, 2018, Rell calculates €750,000 ofcredit losses expected for default events occurring during 2019 and €450,000 of credit losses expected for defaultevents occurring after 2019. Required:1. Assume the Tirish bonds have not had a significant increase in credit risk. Prepare the journal entry to recordany impairment loss as of December 31, 2018.2. Assume the Tirish bonds have had a significant increase in credit risk. Prepare the journal entry to record anyimpairment loss as of December 31, 2018.3. Assume the Tirish bonds have not had a significant increase in credit risk, and that as of December 31, 2019,Rell calculates €650,000 of credit losses expected for default events occurring during…On May 1, 20X1, Starlight Company purchased $750,000 of Gazing Corp's 12% bonds at 100 plus accrued interest. On December 31, 20X1, Starlight Co. received its annual interest. On March 31, 20X3, Starlight decided to sell half the bonds to Twinkly Inc. at 99 plus accrued interest. Prepare the journal entries for the following transactions: a. The purchase of the bonds b. The receipt of all interest c. The sale of the bonds to Twinkly Inc.
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)