Current Attempt in ProgressOn January 1, 2024, Springfield Ltd. purchased $213,000 of 9%, 10-year bonds at face value (100) with the intention of selling thebonds early the next year. Springfield receives interest semi-annually on July 1 and January 1. At December 31, 2024, which is thecompany's fiscal year end, the bonds were trading in the market at 98 (this means 98% of face value).

let's calculate the gain or loss:Calculate the carrying value of the bonds:Carrying value = Face…

Answered: Current Attempt in Progress On January…

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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M On Dec 31, 2020, ABC Corp issued 4-year, 7% bonds with $3,000,000 as par value ABC Corp. received $3,360,000 in cash. The bond interest is paid semiannually on June 30 and December 31 every year :Compute the following Total bonds premium .Interest paid in cash semiannually .The Semiannual amortization amount of the bond premium .Total bonds interest expense over the 4 years السؤال 2
At the beginning of the current year, Candice Company acquired bonds with face amount of P3,000,000 at a cost of P2,820,750. The bonds are held for trading. Bonds pay interest of 12% semiannually on January 1 and July 1 and mature on January 1, 2023. The bonds have an effective yield of 14% and are quoted at 105 at year end. What is the carrying amount of the investment at the end of the current year?
Coronado Inc. issued $920,000 of 10%, 10-year bonds on June 30, 2025, for $814,472. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If Coronado uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2025. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.) Interest expense to be recorded
Current Attempt in Progress On January 2, 2018, Crane Corporation, a small company that follows ASPE, issued $1.8 million of 10% bonds at 98 due on December 31, 2027. Legal and other costs of $180,000 were incurred in connection with the issue. Crane has a policy of capitalizing and amortizing the legal and other costs incurred by including them with the bond recorded at the date of issuance. Interest on the bonds is payable each December 31. The $180,000 of issuance costs are being deferred and amortized on a straight-line basis over the 10- year term of the bonds. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (The straight-line method is not materially different in its effect compared with the effective interest method.) The bonds are callable at 102 (that is, at 102% of their face amount), and on January 2, 2023, the company called a face amount of $1,000,000 of the bonds and retired them. (a) Ignoring income taxes, calculate the…
Cotton Candy Company purchased $1,500,000 of 10% bonds of Caramel Company on January 1, 2024, paying $1,410,375. The bonds mature January 1, 2031; interest is payable each July 1 and January 1. The discount of $89,625 provides an effective yield of 11%. For the year ended December 31, 2024, Cotton Candy Companys income statement will report interest revenue from the Caramel Company bonds of
Foreman Corporation issued P800, 000 of 10% 20 year bonds on January 1, 2019, at P102. Interest is payable semi annually on July 1 and January 1. Assume an effective yield of 9.7705% Prepare the journal entries to record the following:(a) The issuance of the bonds(b) The payment of interest and the related amortization on July 1, 2019(c) The accrual of interest and the related amortization on December 31, 2019.
On January 1, 2018, Rei Company obtained $4,000,000 of 12% face value bonds at $3,767,000 to be held financial assets at amortized cost with a 14% effective yield. Interest on bonds is payable annually on December 31 and bonds mature on January 1, 2022. The effective interest method of amortization is used. The quoted price of the bonds is as follows: December 31, 2018: 97 December 31, 2019: 98 June 30, 2020: 99.a. What amount will be recognized as income on the 2018 income statement?b. What amount will be the gain (loss) on sale assuming all the bonds were sold on June 30, 2020 at 99 plus accrued interest?c. How much is the carrying amount of investment on December 31, 2018?
Mango Co. issued bonds payable on January 1, 2022. Each $1,000 bond is convertible to 10 shares of common stock after January 1, 2024. The bonds have a 5-year term, a stated rate of 8%, and pay interest annually on January 1. The bonds were issued at a premium of $25,274 which provides an effective interest rate of 6%. (Hint: Prepare an amortization table for the five-year term of the bonds. Note that 2023 is the second year in the term of the bonds.) Prepare the adjusting entry at Dec. 31 , 2023.
Wildhorse Co. issued $6,720,000 of 8% bonds on October 1, 2020, due on October 1, 2025. The interest is to be paid twice a year on April 1 and October 1. The bonds were sold to yield 10% effective annual interest. Wildhorse Co. closes its books annually on December 31. (a) Complete the following amortization schedule for the dates indicated. Use the effective-interest method. (Round answers to 0 decimal places, e.g. 5,275.) Date: October 1, 2020 April 1, 2021 October 1, 2021 Cash II Interest Expense Bond Discount 11 Carrying Amount of Bonds $6,201,076
Rose Corporation issued $360,000 of 6%, 10-year bonds on January 1, 2024, for $311,075. This price provided a vield of 8% on the bonds. Interest is payable semiannually on June 30 and December 31, If Rose uses the effective-interest method and assume fiscal year ends on October 31, what is the carrying value of bonds reported on the October 31, 2024 balance sheet? $312.062 O$313.125 $313.857 O $312.718
Accounting At the beginning of the current year, Charlie Company acquired bonds with face amount of P3,000,000 at a cost of P2,820,750. The bonds are held for trading. Bonds pay interest of 12% semiannually on January 1 and July 1 and mature on January 1, 2023. The bonds have an effective yield of 14% and are quoted at 105 at year end. What is the carrying amount of the investment at the end of the current year?
On January 1, 2021, JAPAN COMPANY purchased 12% bonds with face amount of $ 5,000,000 for $ 5,380,000 and it has an effective yield of 10%. Interests are payable annually on December 31 of each year. The bonds are quoted at 120 on December 31, 2021 and 115 on December 31, 2022. The business model of JAPAN COMPANY is to trade or sell the financial assets. QUESTION: Prepare all journal entries for 2021 and 2022 applicable to this transaction.

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