Interest revenue on bonds is reporteda) as an addition to the Investment in Bonds accountb) as part of Comprehensive Income but not part of Net Income.c) as part of other incomed) as part of operating income The relationship of $325,000 to $125,000 expressed as a ratio, is:a) 2.5 to 1Ob) 2 to 1Oc) 2.6 to 1Od) 45 to 1

Bonds means the instrument where the bond holder gives money to bond issuer and in return bond…

Answered: Interest revenue on bonds is reported…

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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In U.S. GAAP, bond issue costs are considered ________. Group of answer choices a period cost a cost of borrowing that reduces the effective interest expense an initial cost that is expensed when the bonds are issued an element in determining the carrying value of the bonds outstanding
2. The printing costs and accounting/legal fees associated with the issuance of bonds should: (A) Be expensed when incurred. (B) Be reported as a deduction from the face amount of the bonds payable on the balance sheet. (C) Be accumulated in a deferred charge account (unamortized asset) and amortized to expense over the life of the bonds. (D) Be recorded as an expense all in the year the bonds mature or are retired. (E) None of the above.
In investment in debt securities accounted for at fair value through other comprehensive income, the difference between the fair value and the accumulated unrealized gain or loss - OCI presented in the statement of financial position would normally equal to: * A. The unrealized gain or loss - OCI presented as part of other comprehensive income B. The amortized cost of the debt securities C. The interest income for the period D. The fair value of the debt securities in the previous period
Demonstrate how to identify and account for debt investments classified for reporting purposes as available-for-sale securities.
The balance in Unamortized Discount on Bonds Payable should be Oa. reported separately in the Current Liabilities section of the balance sheef Ob. added to the face amount of the related bonds payable on the balance sheet. O C. reported in the Paid-In Capital section of the balance sheet. Od. reported on the balance sheet as a deduction from the face amount of the related bonds payable.

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Interest revenue on bonds is reported a) as an addition to the Investment in Bonds account b) as part of Comprehensive Income but not part of Net Income. c) as part of other income d) as part of operating income