GivenToday´s Datefeb-05 Ford Motor Co. Coupon:6.38% Matuirity:02/01/2029 Term to Matuirity24yearsRating:Baa1/BBB- Price: $ 927.87 General Motors Corp. Coupon:8.38% Matuirity:7/15/2033 Term to Matuirity28.5yearsRating:Baa2/BBB- Price: $ 1,061.25 Solution Ford Motor Co.General MotorsSemi-annual YTM Annualized YTM

Here,FM Co.GM Corp.Face Value $ 1,000.00 $ 1,000.00Coupon Rate6.38%8.38%Time to Maturity in…

Answered: Given Today´s Date feb-05 Ford…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Debt Investments Classification Cost orAmortized Cost Fair Valueat end if 2017 Interest Incomein 2017 Sales Pricein 2018 Trading $15,000 $14,000 $750 $14,500 Available-for-Sale $18,000 $15,000 $1,000 $16,000 Held-to-Maturity $24,000 $25,500 $950 For the Houston Company, what amount will appear on the income statement in 2017? Select one: a. ($2,500) b. $1,700 c. ($300) d. $2,700 e. $3,000
Investment in Trading and AFS Securities A company purchases debt securities for $100,000 at the beginning of 2022. It classifies as trading securities and $60,000 as AFS securities. It sells the securities in 2023. Required For each of the following scenarios, indicate the net effect on income and other comprehensive income in each year 2022 and 2023. In each case, any unrealized decline in value below cost is expected to be recovered and is attributed to market factors. a. Fair value, end of 2022 Selling price, 2023 Note: Use a negative sign with an answer to indicate the net effect amount decreases Income or OCI. Income OCI 5,000 ✓ (1,000) * End of 2022 $ 2023 b. Trading securities AFS securities $38,000 $65,000 43,000 64,000 Fair value, end of 2022 Selling price, 2023 (2,000)✓ $ 5,000 x End of 2022 $ 2023 Trading securities AFS securities $45,000 $56,000 42,000 68,000 Note: Use a negative sign with an answer to indicate the net effect amount decreases Income or OCI. OCI (4,000)✓ 0…
me * CengageNowv2 | Online teach x keAssignment/takeAssignmentMain.do?invoker-D&takeAssignmentSessionLocator=&inprogress%-false Updar Discount Amortization On the first day of the fiscal year, a company issues a $1,700,000, 9%, 10-year bond that pays semiannual interest of $76,500 ($1,700,000 x 9% x ½), receiving cash of $1,407,515. Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Interest Expense 1,407,515 Discount on Bonds Payable Cash
In 2021 , Holyoak offers a coupon for $ 15 off qualifying purchases of its new line of products Holyoak sold 11,000 of these products during the year By year - end of 2021 , 8,100 coupons had be $ 15 reduction of purchase price provided to customers Holyoak's historical experience with such coupons indicates that 80 % of customers use the coupon Holyoak recognizes coupon expense are issued What is the expense that Holyoak should report for its promotional coupons in its 2021 income statement ? Choice 132,000 121,500 165,000 132.500
At December 31, 2020, the available-for-sale debt portfolio for Zorro Foods Corp. is as follows: Apple Banana Crisp Total Security Cost $33,600 175,000 59,400 $268,000 Fair Value $31,000 174,000 68,500 $273,500 December 31, 2020, fair value adjustment balance-Dr. $6,400 On January 20, 2021, Zorro sold Apple for $34,100. The sale proceeds are net of brokerage fees. Instructions: 1. Prepare the adjusting entry at December 31, 2020, to report the portfolio at fair value. 2. Prepare the journal entry for the 2021 sale of Apple.
25 On January 1, 2021, Magnesium Company purchased 3,000 of the P1,000 face value, 9%, 5-year debt instruments of MG Company. The debt instruments mature on January 1, 2026 and pay interest annually beginning December 31, 2021. The debt instruments were purchased to yield an 11% rate of interest. The bonds were classified as Investment at amortized cost. Present value factors were as follows: PV factor of 11% after 5 periods 0.593451 PV factor of ordinary annuity of 11% after 5 periods 3.695897 On July 1, 2022, Magnesium sold P1,000,000 face value at a prevailing market rate of 10.5%. As a result of the sale, the management decided to change its current business model to a business model in managing the financial assets wherein any changes in fair value of the investment are taken to profit or loss. The fair value of investment on December 31, 2022 is 10% and remained unchanged at the end of 2023. How much…
How much will be recognized as income on the 2011 income statement?
The comparative balance sheets for Metlock Corporation show the following information. December 312020 2019Cash $33,500 $12,900Accounts receivable 12,400 10,000Inventory 12,100 9,000Available-for-sale debt investments –0– 3,000Buildings –0– 29,800Equipment 44,800 19,900Patents 5,000 6,300 $107,800 $90,900Allowance for doubtful accounts $3,100 $4,500Accumulated depreciation—equipment 2,000 4,500Accumulated depreciation—building –0– 6,000Accounts payable 5,000 3,000Dividends payable –0– 4,900Notes payable, short-term (nontrade) 3,000 4,100Long-term notes payable 31,000 25,000Common stock 43,000 33,000Retained earnings 20,700 5,900 $107,800 $90,900 Additional data related to 2020 are as follows. 1. Equipment that had cost $11,000 and was 40% depreciated at time of disposal was sold for $2,500.2. $10,000 of the long-term note payable was paid by issuing common stock.3. Cash dividends paid were $4,900.4. On January…
INVESTMENT AT AMORTIZED COST CASE III: On January 1, 2026, ABC purchased 9% bonds with a face amount of P4M to yield 10%. The bonds are dated January 1, 2026, 2024, mature on December 31, 2035 and pay interest annually on December 31. The entity used the interest method. What should be reported as interest revenue for 2026?
On January 1, 2021, Panama Company purchased P3,000,000 face amount, 9% bonds. The bonds were purchased to yield 8% interest. The bonds mature on January 1, 2026, and pay interest annually on December 31. The entity used 2 decimal places for the PVF. If measured at amortized cost, how much is the carrying amount of investment in bonds on December 31, 2021?
Question 1: The entry to correct the interest income for 2022 includes a debit tothe investment account of how much? Question 2: How much is the amortization for 2023? Question 3: how much is the gain or loss on sale as of December 31, 2022?
Can you help me to calculate adjusted net income, adjusted net income if FV of security B were 285,000, value of held for trading securities as of 12/31/2020 and assuming these securities at measured at FVOCI, calculate the value of these financial assets as of 12/31/2020 Problem: ABC Corporation buys and sells securities expecting to earn profits on short term differences in price. during 2020, ABC Corporation purchased the following held for trading securities. Security A: Cost- 195,000; FV at 12/31/2020- 225,000 Security B: Cost- 300,000; FV at 12/31/2020- 162,000 Security C: Cost- 678,000; FV at 12/31/2020- 660,000 Before any adjustments related to these securities, ABC Corporation had net income of 900,000

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Given
Today´s Date	feb-05

Ford Motor Co.
Coupon:	6.38%
Matuirity:	02/01/2029
Term to Matuirity	24	years
Rating:	Baa1/BBB-
Price:	$ 927.87

General Motors Corp.
Coupon:	8.38%
Matuirity:	7/15/2033
Term to Matuirity	28.5	years
Rating:	Baa2/BBB-
Price:	$ 1,061.25

Solution
	Ford Motor Co.	General Motors
Semi-annual YTM
Annualized YTM