io 1 TOYOTY Corporation acquired $5,500,000 par value, 12%, five-year bonds on their date of issue, January1, 2019. The market rate at the time of issue was 8% and interest is paid semiannually on June 30 and December31. Capitol will use the effective interest rate method to account for this investment. Capitol intends to hold theinvestment until the bonds mature.Table Present Value of $1Periods4%6%8%12%50.82190.74730.68060.5674100.67560.55840.46320.3220Table Present Value of an Ordinary AnnuityPeriods4%6%8%12%54.45184.21243.99273.6048108.11097.36016.71015.6502Instruction:1. Determine the purchase price of the investment in bonds.2. Prepare the journal entry to record the acquisition of the bond investment.3. Prepare the journal entry to record the interest income at June 30, 2019.4. Prepare the journal entry to record the sale of the bonds at December 31, 2021 for $5,960,000. vo 2 AAA Company has the following securities in its trading portfolio on December 31 of year 1. Allsecurities are purchased during year 1:DescriptionCostFair ValueDolt Corporation common stock: 15,000 shares$ 259,500$ 345,000Single JA common stock: 200,000 shares1,800,0001,000,000Portfolio Totals$ 2,059,500$1,345,000AAA acquired and sold securities from this portfolio during year 2. Specifically, on June 3, the companysold 7,500 shares of Dolt Corporation stock for $16 per share. On November 9, AAA acquired 4,000 shares ofFOAH Stores 'common stock for $86 per share.The AAA Company portfolio of trading equity securities on December 31 of year 2 is presented below.DescriptionCostFair ValueDolt Corporation common stock: 7,500 sharesS 129,750$ 172,500Single JA common stock: 200,000 shares1,800,0001,000,000FOAH common stock: 4,000 shares344,000324,000Portfolio Totals$ 2,273,750$1,496,500Instruction:1. Prepare the journal entry to record the acquisition of the investment in year 1.2. Prepare the journal entry to adjust the portfolio to fair value at the end of year 1.3. Prepare the journal entry to record the sale of the Dot Corporation common shares.4. Prepare the journal entry to record the acquisition of the FOAH common stock.5. Prepare the journal entry to adjust the portfolio to fair value at the end of year 2.

Note : Since you have posted two questions , we will solve the first question for you . If you want…

do 1 TOYOTY Corporation acquired $5,500,000 par value, 12%, five-year bonds on their date of issue, January 1, 2019. The market rate at the time of issue was 8% and interest is paid semiannually on June 30 and December 31. Capitol will use the effective interest rate method to account for this investment. Capitol intends to hold the investment until the bonds mature. Table Present Value of $1 Periods 4% 6% 8% 12% 5 0.8219 0.7473 0.6806 0.5674 10 0.6756 0.5584 0.4632 0.3220 Table Present Value of an Ordinary Annuity Periods 4% 6% 8% 12% 4.4518 4.2124 3.9927 3.6048 10 8.1109 7.3601 6.7101 5.6502 Instruction: 1. Determine the purchase price of the investment in bonds. 2. Prepare the journal entry to record the acquisition of the bond investment. 3. Prepare the journal entry to record the interest income at June 30, 2019.

do 1 TOYOTY Corporation acquired $5,500,000 par value, 12%, five-year bonds on their date of issue, January 1, 2019. The market rate at the time of issue was 8% and interest is paid semiannually on June 30 and December 31. Capitol will use the effective interest rate method to account for this investment. Capitol intends to hold the investment until the bonds mature. Table Present Value of $1 Periods 4% 6% 8% 12% 5 0.8219 0.7473 0.6806 0.5674 10 0.6756 0.5584 0.4632 0.3220 Table Present Value of an Ordinary Annuity Periods 4% 6% 8% 12% 4.4518 4.2124 3.9927 3.6048 10 8.1109 7.3601 6.7101 5.6502 Instruction: 1. Determine the purchase price of the investment in bonds. 2. Prepare the journal entry to record the acquisition of the bond investment. 3. Prepare the journal entry to record the interest income at June 30, 2019.

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

1
On October 1, 2023 macklin corporation issued 5 %, 10-year bonds with a face value of $6,000,000 at 104. Interest is paid on october 1 and April 1, with any premiums or discounts amortized on a straight-line basis. Bond interest payable reported on the december 31, 2023 balance sheet of Macklin corporation would be. A- $75,000 B - $ 69,000 C $138, 000 D $81, 000
Sagar
View Policies Current Attempt in Progress Marigold Corporation issues $ 430,000 of 9% bonds, due in 10 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. Click here to view factor tables. Compute the issue price of the bonds. (Round present value factor calculations to 5 decimal places, e.g 1.25124 and the final answer to 0 decimal places eg, 58,971.) Issue price of the bonds %24
Problem 21-4 (IFRS - From FVPL to amortized cost) On January 1, 2020, Royalty Company purchased 9% bonds with face amount of P6,000,000. The bonds mature on January 1, 2025 and were purchased for P5,550,000 to yield 11%. The entity classified the bonds as held for trading and interest is payable annually every December 31. The entity provided the following information about fair value of the bonds and effective rate: Fair value Effective rate December 31, 2020 December 31, 2021 5,450,000 6,150,000 12% 8% On December 31, 2021, the entity changed the business model for this investment to collect contractual cash flows composed of principal and interest. On January 1, 2022, the fair value of the bonds did not change. Required: 1. What is the interest income for 2020? 2. What amount of unrealized loss should be recognized in profit or loss for 2020? 3. What amount of unrealized gain should be recognized in profit or loss for 2021? 4. What is the interest income for 2022? 5. Prepare journal…
Zillow Corp. issued question attached inss thnaks gankodgnro wgworn
None
None
Presented below is an amortization schedule related to Flint Company's 5-year, $150,000 bond with a 7% interest rate and a 4% yield, purchased on December 31, 2023, for $170,034. Date Cash Received Interest Revenue Bond Premium Carrying Amount Amortization of Bonds 12/31/23 $170,034 12/31/24 $10,500 $6,801 $3,699 166,335 12/31/25 10,500 6,653 3,847 162,488 12/31/26 10,500 6,500 4,000 158,488 12/31/27 10,500 6,340 4,160 154,328 12/31/28 10,500 6,172 4,328 150,000 The following schedule presents a comparison of the amortized cost and fair value of the bonds at year-end. 12/31/24 12/31/25 12/31/26 12/31/27 12/31/28 Amortized cost $166,335 $162,488 $158,488 $154,328 $150,000 Fair value 165,800 164,700 160,400 155,400 150,000 (a) Prepare the journal entry to record the purchase of these bonds on December 31, 2023, assuming the bonds are classified as held-to-maturity securities. (b) Prepare the journal entry related to the held-to-maturity bonds for 2024. (c) Prepare the journal entry…
Subject:
sa
QUESTION Part A) On January 1, 2023 its issue date, Diogenes Inc. purchased a 9%, $200,000, 10-year bond. Interest is paid annually on December 31. Diogenes uses the amortized cost model and the effective interest method for amortizing premium or discount. The current market rate was 10% and as a result Diogenes paid $187,711 for the bonds. On December 31, 2023, the bonds have a market value of $185,000. Diogenes applies IFRS. Instructions Record the receipt of interest for 2023. Part B) Zeus Corporation is considering making a significant long-term investment in Ares Ltd., a young and very promising company. Zeus decides to make a smaller investment first, and if Ares turns out to be successful, Zeus intends to make an additional investment to reach significant influence. Ares has 110,000 shares outstanding. On January 1, 2023, Ares issues Zeus 10,000 shares for $400,000 in cash (so now there are 120,000 shares outstanding). Additional information: 1. On November 1, 2023, Ares…