CBRE Group purchased 10,000 Dover Corporation bonds in 2018 for $59 per bond and classified the investment as securities available-for-sale. Dover bonds have a 6% coupon rate. The value of the Dover investment was $83 per bond on December 31, 2019, and $92 per bond on December 31, 2020. During 2021, CBRE sold all of its Dover investment at $150 per bond. in its 2021 income statement, CBRE would report as unrealized gains/losses: Multiple Choice A gain of $910,000. A gain of $580,000. A gain of $330,000. A gain of $1,240,000. O O

CBRE Group purchased 10,000 Dover Corporation bonds in 2018 for $59 per bond and classified the investment as securities available-for-sale. Dover bonds have a 6% coupon rate. The value of the Dover investment was $83 per bond on December 31, 2019, and $92 per bond on December 31, 2020. During 2021, CBRE sold all of its Dover investment at $150 per bond. in its 2021 income statement, CBRE would report as unrealized gains/losses: Multiple Choice A gain of $910,000. A gain of $580,000. A gain of $330,000. A gain of $1,240,000. O O

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

On January 1, 2023, Larkspur Corporation purchased a newly issued $1,500,000 bond. The bond matured on December 31, 2025, and paid interest at 6% every June 30 and December 31. The market interest rate was 8%. Larkspur's fiscal year-end is October 31, and the company had the intention and ability to hold the bond until its maturity date. The bond will be accounted using the amortized cost model. Calculate the price paid for the bond using a financial calculator or Excel functions. (Round answers to 2 decimal places, eg. 52.75.) the price paid for the bond is $ 1,421,367.95
A company purchased bonds on July 1, 2024, for $193,404. This price represents a market rate of 9% on bone that have a face amount of $200,000, have a stated rate of 8%, pay semiannual interest, and mature in 4 year As of December 31, 2024, the fair value of the bonds has increased to $195,000. Assuming the investment is classified as held-to-maturity securities, what amount would the company report for its investment in bonds o December 31, 2024?
On April 1, 2020 Everjoy Company purchased $80,000 of Miller Corporation's 6% bonds at a purchase price of 96. At the time of purchase the market rate of interest was 8%. Everjoy Company, whose year end is December 31, expects to hold the bonds until their maturity date 5 years from the date of purchase. Interest on the bonds will be paid every April 1 and October 1 until maturity. What is the carrying value (amortized cost) of the bond that Everjoy Company would report on October 1, 2020? O $78,144 O $77,120 O $79,488 O $77,472 O None of the above.
Prepare an amortization schedule for the bond. (Round answers to 2 decimal places, e.g. 52.75.) $ $ ● ● ● Cash Received ● January 1, 2023 June 30, 2023 October 31, 2023 $ $ Date Interest Revenue Prepare the journal entries on the books of Marin Corporation for each of the following dates. (Round answers to 2 decimal places, e.g. 52.75. Credit account titles are automatically indented when the amount is entered. Do not indent manual If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record entries in the order displayed the problem statement. List all debit entries before credit entries.) $ $ Account Titles and Explanation Discount Amortization December 31, 2023 December 31, 2025 (two entries) one for interest and one for maturity of bond $ Amortized Cos (Present Value Debit 125! 1325
AI Tool and Dye issued 8% bonds with a face amount of $160 million on January 1, 2018. The bonds sold for$150 million. For bonds of similar risk and maturity the market yield was 9%. Upon issuance, AI elected theoption to report these bonds at their fair value. On June 30, 2018, the fair value of the bonds was $145 millionas determined by their market value on the NASDAQ. Will AI report a gain or will it report a loss when adjusting the bonds to fair value? If the change in fair value is attributable to a change in the interest rate, did the rateincrease or decrease? Will the gain or loss be reported in net income or as OCI?
Fuzzy Monkey Technologies, Incorporated purchased as a long-term investment $220 million of 8% bonds, dated January 1, on January 1, 2024. Management has the positive intent and ability to hold the bonds until maturity. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $201 million. Interest is received semiannually on June 30 and December 31. Due to changing market conditions, the fair value of the bonds at December 31, 2024, was $210 million. Required: 1. to 3. Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). 4. At what amount will Fuzzy Monkey report its investment in the December 31, 2024 balance sheet? 5. How would Fuzzy Monkey's 2024 statement of cash flows be affected by this investment? (If more than one approach is possible, indicate the one that is most likely.)
On January 1, 2021, Canada Corp. purchased bonds with a face value of P7,500,000 and a stated interest rate of 10% per year payable semi-annually every June 30 and December 31. The bonds were acquired to yield 11%. These were recorded as financial assets at amortized cost. On July 31, 2024, the bonds were sold at 111 including accrued interest. How much is the purchase price of the bonds? Round off to the nearest whole number.
McWherter Instruments sold $400 million of 8% bonds, dated January 1, on January 1, 2021. The bonds mature on December 31, 2040 (20 years). For bonds of similar risk and maturity, the market yield was 10%. Interest is paid semiannually on June 30 and December 31. Blanton Technologies, Inc., purchased $400,000 of the bonds as a long-term investment. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds issued on January 1, 2021. 2. Prepare the journal entries to record (a) their issuance by McWherter and (b) Blanton's investment on January 1, 2021. 3. Prepare the journal entries by (a) McWherter and (b) Blanton to record interest on June 30, 2021 (at the effective rate). 4. Prepare the journal entries by (a) McWherter and (b) Blanton to record interest on December 31, 2021 (at the effective rate). Complete this question by entering your answers in the tabs below. Required…
Fuzzy Monkey Technologies, Incorporated purchased as a long-term investment $150 million of 6% bonds, dated January 1, on January 1, 2024. Management has the positive intent and ability to hold the bonds until maturity. For bonds of similar risk and maturity the market yield was 8%. The price paid for the bonds was $133 million. Interest is received semiannually on June 30 and December 31. Due to changing market conditions, the fair value of the bonds at December 31, 2024, was $140 million. Required: 1. to 3. Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). 4. At what amount will Fuzzy Monkey report its investment in the December 31, 2024 balance sheet? 5. How would Fuzzy Monkey's 2024 statement of cash flows be affected by this investment? (If more than one approach is possible, indicate the one that is most likely.)
A company holds a $100,000 face value corporate bond, bought January 1, 2023, paying 3% annually on December 31, and maturing December 31, 2025. The company paid $102,884 for the bond, to yield 2%. The company categorizes the bond as a held-to-maturity investment, and its accounting year ends December 31. What amount will the company report as interest revenue on the bond for 2024? Round answers to the nearest dollar.
On January 1, 2018, CEBU Company purchased 12% bonds, having a maturity value of P800,000, for P860,652 including transaction cost of P110,000. The bonds provide the bondholders with a 10% yield, are dated January 1, 2018, and mature January 1, 2023, with interest receivable December 31 of each year. CEBU’s business model requires the accounting of the debt investment at Fair Value Through Other Comprehensive Income (FVOCI). The bonds are quoted at 108 and 109 at the end of 2018 and 2019 respectively. At what amount should the debt investment be initially recognized at the time of acquisition?
On January 1, 2018, OCEANIC Company purchased 12% bonds, having a maturity value of P800,000, for P860,652 including transaction cost of P110,000. The bonds provide the bondholders with a 10% yield, are dated January 1, 2018, and mature January 1, 2023, with interest receivable December 31 of each year. OCEANIC’s business model requires the accounting of the debt investment at Fair Value Through Profit or Loss (FVPL). The bonds are quoted at 108 and 109 at the end of 2018 and 2019 respectively. On April 1, 2020, the bonds were sold at 112 plus accrued interest. At what amount should the debt investment be initially recognized at the time of acquisition?