On July 1, 20x1, Santa Co. acquires P2,000,000 face amount,10% bonds for P2,000,000 and classifies the investment asFVOCI. On Dec. 31, 20x1, the bonds are quoted at 98 and SantaCo. estimates 12-month expected credit losses of P10,000.What amounts (excluding interest) are recognized in profit orloss (P/L) and other comprehensive income (OCI) in 20x1?OCIP/LOCIP/L10,000b. 30,00030,00010,000с. 040,000a.d. 40,0000.

The question asked about the balance recorded in Other comprehensive income (OCI) and amount…

Answered: On July 1, 20x1, Santa Co. acquires…

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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3. Conor Corporation has $10,500,000 of 5 percent, 10-year bonds dated January 1, with interest payment dates of June 30 and December 31. The company’s fiscal year ends December 31. A. Assume the bonds are issued for $9,720,000 on January 1 to yield an effective interest rate of 6 percent. Prepare journal entries for January 1, June 30, and December 31, assuming that Conor Corporation uses the effective interest method to amortize bond premiums or discounts. B. Calculate the net book value of the bonds after the interest payments have been made on June 30 and December 31.
7
On the day Federer Ltd redeemed its $1,000,000 face value bonds at 98, their carrying value was $1,200,000. Prepare a residual analysis for the bond redemption. Prepare the journal entry for the bond redemption. If you recognise a gain or loss, state where in the Statement of Comprehensive Income the gain or loss should appear
On 1 January 20X5, Franco Ltd. purchased $440,000 of Gentron Company 7.00% bonds. The bonds pay semi-annual interest each 30 June and 31 December. The market interest rate was 8% on the date of purchase. The bonds mature on 31 December 20X10. The company has a 31 December year-end. Required: 1. Calculate the price paid by Franco Ltd. (Do not round Intermediate calculations. Round your final answer to the nearest dollar amount.) Price paid Period 2. Assume that the bond is classified as an AC investment. Construct a table that shows interest revenue reported by Franco, and the carrying value of the investment, for four interest periods. Use the effective-interest method. (Do not round Intermediate calculations. Round your final answers to the nearest dollar amount.) 0 $ 1 2 3 4 Cash Payment 361,607 View transaction list Interest Revenue Amortization Bond Carrying Value 3. Prepare the entries for the first four interest periods based on your calculations in requirement 2. (If no entry is…
On January 1, Jim Shorts Corporation issued bonds for $580 million. This bond issue was originally issued at premium. During the same year, $1,500,000 of the bond premium was amortized. On a statement of cash flows prepared using the indirect method, Jim Shorts Corporation should report: O that $1.5 million to be added to net income O An investing activity of $580 million. O A financing activity of $300 million. O that $1.5 million to be deducted from net income
Selected debt investment transactions for Easy A Inc., a retail business, are listed below. Easy A Inc. has a fiscal year ending on December 31. Year 1: Feb. 1 May 1 Jun. 1 Sept. 1 Oct. 1 Dec. 1 Dec. 31 Year 2: Mar. 1 Jun. 1 Sept. 1 Bought $35,000 of 6%, XYZ Co. 12-year bonds at their face amount plus accrued interest of $700. The bonds pay interest semiannually on June 1 and December 1. Bought $200,000 of Simple Tree 5%, 20-year bonds at their face amount plus accrued interest of $2,500. The bonds pay interest semiannually on March 1 and September 1. Received semiannual interest on the XYZ Co. bonds. Received semiannual interest on the Simple Tree bonds. Sold $15,000 of Simple Tree bonds at 102% plus accrued interest of $63. Received semiannual interest on the XYZ Co. bonds. Accrued $3,135 interest on the Simple Tree bonds. Accrued $175 interest on the XYZ Co. bonds. Received semiannual interest on the Simple Tree bonds. Received semiannual interest on the XYZ Co. bonds. Received…
On January 1, $834,000, 5-year, 10% bonds, were issued for $808,980. Interest is paid semiannually on January 1 and July 1. If the issuing corporation uses the straight-line method to amortize discount on bonds payable, what is the semiannual amortization amount? Select the correct answer. $5,004 $2,502 $41,700 O $25,020
On January 1, $954,000, 5-year, 10% bonds, were issued for $925,380. Interest is paid semiannually on January 1 and July 1. If the issuing corporation uses the straight-line method to amortize discount on bonds payable, what is the semiannual amortization amount? Select the correct answer. $47,700 $5,724 $28,620 $2,862
sanju
On January 1, $881,000, 5-year, 10% bonds were issued for $854,570. Interest is paid semiannually on January 1 and July 1. If the issuing company uses the straight-line method to amortize a discount on bonds payable, the semiannual amortization amount is a. $44,050 b. $26,430 c. $5,286 d. $2,643
Hermosa Vista Company issued $180,000 5-year, 6.00% bonds and received $183,843 in cash. The market rate of interest when the bonds were issued was 5.50%. What is the amount of interest expense to be recorded for the first annual interest period if the company uses simplified effective-interest amortization? Multiple Choice $9,900.00 $10,111.37 $10,800.00 $11,030.58
(J) Hambelton Ltd. issued $4,550,000 of 5% bonds payable on 1 September 20X9 to yield 4%. Interest on the bonds is paid semi-annually and is payable each 28 February and 31 August. The bonds were dated 1 March 20X8, and had an original term of five years. The accounting period ends on 31 December. The effective-interest method is used. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required:1. Determine the price at which the bonds were issued. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) 2. Prepare a bond amortization table for the life of the bond. (Round time value factor to 5 decimal places. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "0" wherever required.) 3.Prepare journal entries to record the issuance of the bonds, payment of…

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