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g subsequent events s

g subsequent events s

FINANCIAL ACCOUNTING
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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Question 7-'sub sequent event Karen Company's fiscal year ends at December31. The company issued its financial statements on March 15, 2020. During early 2020, the following events occurred. 1.→On January 11, 2020, the company issued 10,000 15-year bonds for $15,000,000. Face value per bond equals $1,000. Stated interest rate equals 5%. - 2.→On March 2, 2020, due to the unexpected economic downturn, the accountant of Karen Company re-estimated the accounts receivable to have an en ding balance of $14,550,000, which was previously recorded at $21,000,000 on December 31, 2019. Required Discuss how the preceding subsequent events should be reflected in the 2019 financial· statements.
Transcribed Image Text:Question 7-'sub sequent event Karen Company's fiscal year ends at December31. The company issued its financial statements on March 15, 2020. During early 2020, the following events occurred. 1.→On January 11, 2020, the company issued 10,000 15-year bonds for $15,000,000. Face value per bond equals $1,000. Stated interest rate equals 5%. - 2.→On March 2, 2020, due to the unexpected economic downturn, the accountant of Karen Company re-estimated the accounts receivable to have an en ding balance of $14,550,000, which was previously recorded at $21,000,000 on December 31, 2019. Required Discuss how the preceding subsequent events should be reflected in the 2019 financial· statements.
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