IV. (27%) Linton Ltd. purchased 70 Horner AG 9%, 10-year, €1,000 bonds on January 1, 2022, for €70,000. The bonds pay interest annually on January 1. The market value of the bonds was € 70,525 at the end of 2022. On January 1, 2023, after receipt of interest, Linton sold all of the bonds for €71,000. Instructions Prepare the journal entries to record the transactions described above, including closing entries. Assuming: Linton's business model is to hold these bonds to collect contractual cash flows and sell.

IV. (27%) Linton Ltd. purchased 70 Horner AG 9%, 10-year, €1,000 bonds on January 1, 2022, for €70,000. The bonds pay interest annually on January 1. The market value of the bonds was € 70,525 at the end of 2022. On January 1, 2023, after receipt of interest, Linton sold all of the bonds for €71,000. Instructions Prepare the journal entries to record the transactions described above, including closing entries. Assuming: Linton's business model is to hold these bonds to collect contractual cash flows and sell.

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 1E: Parilo Company acquired 170,000 of Makofske Co., 5% bonds on May 1, 2016, at their face amount....

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Parilo Company acquired 170,000 of Makofske Co., 5% bonds on May 1, 2016, at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, 2016, Parilo Company sold 50,000 of the bonds for 96. Journalize entries to record the following: a. The initial acquisition of the bonds on May 1. b. The semiannual interest received on November 1. c. The sale of the bonds on November 1. d. The accrual of 1,000 interest on December 31, 2016.
Irving Inc. sold bonds with a $50,000, 10% interest, and 10-year term at $52,000. What is the total amount of interest expense over the life of the bonds?
Linton Ltd. purchased 70 Horner AG 9%, 10-year, €1,000 bonds on January 1, 2022, for €70,000. The bonds pay interest annually on January 1. The market value of the bonds was € 70,525 at the end of 2022. On January 1, 2023, after receipt of interest, Linton sold all of the bonds for €71,000. Instructions Prepare the journal entries to record the transactions described above, including closing entries. Assuming: Linton’s business model is to hold these bonds to collect contractual cash flows and sell.
On January 1, 2020, Lucas Company purchased P1,200,000, 14% bonds of Andres Company for P1,381,934, a price that yields 10%. Interest on these bonds is payable every December 31. The bonds mature on December 31, 2024. Market value of the bonds on different dates is as follows: December 31, 2020 112 December 31, 2021 108 December 31, 2022 105 Assume that the company intended to collect the principal and interest over the term of the bonds and did not choose the fair value option. At what amount should the bond investments be shown on December 31, 2020 statement of financial position?Required to answer. Single choice.
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Accounting Thank you in advance ! ABC Company purchased 50 Meissner AG 8%, 10-year, €1,000 bonds on January 1, 2022, for €50,000. The bonds pay interest annually on January 1. ABC's business model is to hold these bonds to collect contractual cash flows and sell. The market value of the bonds was €50,500 at the end of 2022. On January 1, 2023, after receipt of interest, ABC Company sold 30 of the bonds for €30,300. INSTRUCTIONS a. Prepare the journal entries to record the purchase of the bonds on January 1, 2022. b. Prepare the adjusting entry for the accrual of interest and the changes in bond value on December 31, 2022. (You can skip the closing entry.) c. Show the statement of financial position presentation from asset through equity section regarding the bond investments on December 31, 2022. d. Prepare the journal entry to record the receipt of interest, sale of the bonds, and reclassification adjustment on January 1, 2023. (You can skip the closing entry.)
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3. On October 1, Dennis Company purchased P200,000 face value 12% bonds for 98 plus accrued interest and brokerage fees and classified them as held-to-maturity securities. Interest is paid semiannually on January 1 and July 1. Brokerage fees for this transaction were P700. At what amount should this acquisition of bonds be recorded? a. P196,000 b. P196,700 c. P202,000 d. P202,700
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On January 1, 2020, Aspin Company purchased $1,200,000, 14% bonds of Bulldog Company for $1,381,934, a price that yields 10%. Interest on these bonds is payable every December 31. The bonds mature on December 31, 2024. Market value of the bonds on different dates is as follows: December 31, 2020 112 December 31, 2021 108 December 31, 2022 105 Assume that the company intended to collect the principal and interest over the term of the bonds and did not choose the fair value option. At what amount should the bond investments be shown on December 31, 2020 statement of financial position?