MegaHoldings Group, a significant conglomerate, and MiniFirm Ltd, its subsidiary, are involved in a financial transaction. Initially, on January 1, 2021,MegaHoldings Group issued bonds into the financial market. Two years later, on January 1, 2023, MiniFirm Ltd bought these bonds from the marketentirely. The financial specifics for this transaction have been updated as follows:BondsNominal (Face) Value of the bonds: $1,000,000Coupon Rate: 6%Initial Bond Release by MegaHoldings Group.Issuance Price: $807,470Market Rate: 9%Bond Acquisition by MiniFirm Ltd.Acquisition Price: $1,064,632Market Rate at Acquisition: 5%Please select the right consolidation entry [B]Multiple ChoiceBonds Payable (B/P) 1,000,000Interest Revenue 53.232Loss on Retirement of Bonds 230,678Discounts on Bonds Payable (B/P) 150,990Investment in Bonds 1,057,864Interest Expense 75,056 OBonds Payable (B/P) 1,000,000Interest Revenue 53,232Loss on Retirement of Bonds 266,314Discounts on Bonds Payable (B/P) 179,858Investment in Bonds 1,064,632Interest Expense 75,056Bonds Payable (B/P) 1,000,000Interest Revenue 60,000Loss on Retirement of Bonds 208,854Discounts on Bonds Payable (B/P) 150,990Investment in Bonds 1,057,864Interest Expense 60,000Bonds Payable (B/P) 1,000,000Interest Revenue 52,893Loss on Retirement of Bonds 230,678Discounts on Bonds Payable (B/P) 179,858)Investment in Bonds 1,057,8641Interest Expense 73,812

Bonds Payable: This account is credited for the full face value of the bonds ($1,000,000) since they…

MegaHoldings Group, a significant conglomerate, and MiniFirm Ltd, its subsidiary, are involved in a financial transaction. Initially, on January 1, 2021, MegaHoldings Group issued bonds into the financial market. Two years later, on January 1, 2023, MiniFirm Ltd bought these bonds from the market entirely. The financial specifics for this transaction have been updated as follows: Bonds Nominal (Face) Value of the bonds: $1,000,000 Coupon Rate: 6% Initial Bond Release by MegaHoldings Group Issuance Price: $807,470 Market Rate: 9% Bond Acquisition by MiniFirm Ltd: Acquisition Price: $1,064,632 Market Rate at Acquisition: 5% Please select the right consolidation entry [B)

MegaHoldings Group, a significant conglomerate, and MiniFirm Ltd, its subsidiary, are involved in a financial transaction. Initially, on January 1, 2021, MegaHoldings Group issued bonds into the financial market. Two years later, on January 1, 2023, MiniFirm Ltd bought these bonds from the market entirely. The financial specifics for this transaction have been updated as follows: Bonds Nominal (Face) Value of the bonds: $1,000,000 Coupon Rate: 6% Initial Bond Release by MegaHoldings Group Issuance Price: $807,470 Market Rate: 9% Bond Acquisition by MiniFirm Ltd: Acquisition Price: $1,064,632 Market Rate at Acquisition: 5% Please select the right consolidation entry [B)

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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The balance sheet at December 31, 2024, for Nevada Harvester Corporation includes the liabilities listed below: a. 7% bonds with a face amount of $46 million were issued for $46 million on October 31, 2015. The bonds mature on October 31, 2035. Bondholders have the option of calling (demanding payment on) the bonds on October 31, 2025, at a redemption price of $46 million. Market conditions are such that the call is not expected to be exercised. b. Management intended to refinance $6.6 million of its 14% notes that mature in May 2025. In early March, prior to the actual issuance of the 2024 financial statements, Nevada Harvester negotiated a line of credit with a commercial bank for up to $4.6 million any time during 2025. Any borrowings will mature two years from the date of borrowing. c. Noncallable 6% bonds with a face amount of $14.5 million were issued for $14.5 million on September 30, 2005. The bonds mature on September 30, 2025. Sufficient cash is expected to be available to…
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On January 1, 2020, Blossom Ltd. issued 820 5-year, 11% convertible bonds at par of $1,000, with interest payable each December 31. Each bond is convertible into 100 common shares, and the current fair value of each common share is $6. Similar straight bonds carry an interest rate of 13%. Calculate the PV of the debt component by itself. Calculate using any of the following methods: (1) factor tables, (2) a financial calculator, or (3) Excel function PV. QUESTION: 1) PV of the debt component 2) How should Blossom record the issuance if it follows IFRS? Use the amount you arrived at in part (a) using a financial calculator or Excel. Date Account Titles and Explanation January 1 enter an account title enter an account title January 1 enter an account title Date Account Titles and Explanation enter an account title Debit 3) How should Blossom record the issuance if it follows ASPE? enter an account title enter a debit amount enter a credit amount Credit enter a debit amount enter a credit…