Appling Enterprises issued 9% bonds with a face amount of $430,000 on January 1, 2024. • The bonds sold for $393,108 and mature in 2043 (20 years). • For bonds of similar risk and maturity the market yield was 10%. • Interest is paid semiannually on June 30 and December 31. Appling determines interest expense at the effective rate. Appling elected the option to report these bonds at their fair value. • The fair values of the bonds at the end of each quarter during 2024 as determined by their market values in the over-the-counter market were the following: ● ● $ 420,000 405,000 400,000 407,000 General (risk-free) interest rates did not change during 2024. Required: 1. By how much will Appling's comprehensive income be increased or decreased by the bonds (ignoring taxes) in the March 31 quarterly financial statements? 2. By how much will Appling's comprehensive income be increased or decreased by the bonds (ignoring taxes) in the June 30 quarterly financial statements? 3. By how much will Appling's comprehensive income be increased or decreased by the bonds (ignoring taxes) in the September 30 quarterly financial statements? March 31 June 30 September 30 December 31 4. By how much will Appling's comprehensive income be increased or decreased by the bonds (ignoring taxes) in the December 31 annual financial statements? Note: For all requirements, do not round your intermediate calculations. Round your final answers to the nearest whole dollar.
Appling Enterprises issued 9% bonds with a face amount of $430,000 on January 1, 2024. • The bonds sold for $393,108 and mature in 2043 (20 years). • For bonds of similar risk and maturity the market yield was 10%. • Interest is paid semiannually on June 30 and December 31. Appling determines interest expense at the effective rate. Appling elected the option to report these bonds at their fair value. • The fair values of the bonds at the end of each quarter during 2024 as determined by their market values in the over-the-counter market were the following: ● ● $ 420,000 405,000 400,000 407,000 General (risk-free) interest rates did not change during 2024. Required: 1. By how much will Appling's comprehensive income be increased or decreased by the bonds (ignoring taxes) in the March 31 quarterly financial statements? 2. By how much will Appling's comprehensive income be increased or decreased by the bonds (ignoring taxes) in the June 30 quarterly financial statements? 3. By how much will Appling's comprehensive income be increased or decreased by the bonds (ignoring taxes) in the September 30 quarterly financial statements? March 31 June 30 September 30 December 31 4. By how much will Appling's comprehensive income be increased or decreased by the bonds (ignoring taxes) in the December 31 annual financial statements? Note: For all requirements, do not round your intermediate calculations. Round your final answers to the nearest whole dollar.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Appling Enterprises issued 9% bonds with a face amount of $430,000 on January 1, 2024.
The bonds sold for $393,108 and mature in 2043 (20 years).
For bonds of similar risk and maturity the market yield was 10%.
• Interest is paid semiannually on June 30 and December 31.
●
Appling determines interest expense at the effective rate.
Appling elected the option to report these bonds at their fair value.
The fair values of the bonds at the end of each quarter during 2024 as determined by their
market values in the over-the-counter market were the following:
●
March 31
June 30
$ 420,000
405,000
400,000
407,000
General (risk-free) interest rates did not change during 2024.
Required:
1. By how much will Appling's comprehensive income be increased or decreased by the
bonds (ignoring taxes) in the March 31 quarterly financial statements?
2. By how much will Appling's comprehensive income be increased or decreased by the
bonds (ignoring taxes) in the June 30 quarterly financial statements?
3. By how much will Appling's comprehensive income be increased or decreased by the
bonds (ignoring taxes) in the September 30 quarterly financial statements?
4. By how much will Appling's comprehensive income be increased or decreased by the
bonds (ignoring taxes) in the December 31 annual financial statements?
September 30
December 31
Note: For all requirements, do not round your intermediate calculations. Round your final
answers to the nearest whole dollar.
> Answer is complete but not entirely correct.
decreased
decreased
increased
decreased
1. Appling's comprehensive income will be
2. Appling's comprehensive income will be
3. Appling's comprehensive income will be
4. Appling's comprehensive income will be
by $ 26,892
15,000 X
by $
by
$
5,000
by
$
7,000 X
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