On April 1, 2024, Déjà Vu Company issued 12% bonds that have a total face value of$140,000 (each bond has a face value of $1,000). The bonds sold for $164,023 and mature in 20years. The effective interest rate for the bonds was 10% on 4/1/24. Interest is paid semiannuallyon September 30 and March 31. The market value of the bonds was 102 on 12/31/24 and $104 on12/31/25. The market rate of interest on the bonds fell to 9% on 8/1/24.David Company purchased all of the bonds as an investment on 4/1/2024. A partial amortizationschedule appears below.9/30/2024 8,4003/31/2025 8,4009/30/2025 8,4003/31/2026 8,4009/30/2026 8,4003/31/2027 8,4009/30/2027 8,400CashInterest$__InterestIncome8,2018,1918,1818,1708,1588,1468,134$_PremiumAmortized199209219230242254266What is the amount of assets related to the bonds on David's balance sheet:As of 12/31/24 if the bonds are accounted for as held-to-maturity.CarryingValue164,023163,824163,615$_As of 12/31/2024 if the bonds are accounted for as available-for-sale.As of 12/31/2024 if the bonds are accounted for as trading.163,396163,166162,924162,670162,404

Investment in debt securities can be classified under three different categories based on the intent…

On April 1, 2024, Déjà Vu Company issued 12% bonds that have a total face value of $140,000 (each bond has a face value of $1,000). The bonds sold for $164,023 and mature in 20 years. The effective interest rate for the bonds was 10% on 4/1/24. Interest is paid semiannually on September 30 and March 31. The market value of the bonds was 102 on 12/31/24 and $104 on 12/31/25. The market rate of interest on the bonds fell to 9% on 8/1/24. David Company purchased all of the bonds as an investment on 4/1/2024. A partial amortization schedule appears below. Cash Interest 9/30/2024 8,400 3/31/2025 8,400 9/30/2025 8,400 3/31/2026 8,400 9/30/2026 8,400 3/31/2027 8,400 9/30/2027 8,400 Interest Income $_ 8,201 8,191 8,181 8,170 8,158 8,146 8,134 Premium Amortized 199 209 219 230 242 254 266 Carrying Value 164,023 163,824 163,615 163,396 163,166 What is the amount of assets related to the bonds on David's balance sheet: As of 12/31/24 if the bonds are accounted for as held-to-maturity. As of 12/31/2024 if the bonds are accounted for as trading. 162,924 162,670 162,404 $_ As of 12/31/2024 if the bonds are accounted for as available-for-sale.

On April 1, 2024, Déjà Vu Company issued 12% bonds that have a total face value of $140,000 (each bond has a face value of $1,000). The bonds sold for $164,023 and mature in 20 years. The effective interest rate for the bonds was 10% on 4/1/24. Interest is paid semiannually on September 30 and March 31. The market value of the bonds was 102 on 12/31/24 and $104 on 12/31/25. The market rate of interest on the bonds fell to 9% on 8/1/24. David Company purchased all of the bonds as an investment on 4/1/2024. A partial amortization schedule appears below. Cash Interest 9/30/2024 8,400 3/31/2025 8,400 9/30/2025 8,400 3/31/2026 8,400 9/30/2026 8,400 3/31/2027 8,400 9/30/2027 8,400 Interest Income $_ 8,201 8,191 8,181 8,170 8,158 8,146 8,134 Premium Amortized 199 209 219 230 242 254 266 Carrying Value 164,023 163,824 163,615 163,396 163,166 What is the amount of assets related to the bonds on David's balance sheet: As of 12/31/24 if the bonds are accounted for as held-to-maturity. As of 12/31/2024 if the bonds are accounted for as trading. 162,924 162,670 162,404 $_ As of 12/31/2024 if the bonds are accounted for as available-for-sale.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Ellis Company issues 6.5%, five-year bonds dated January 1, 2021, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $255,333. The annual market rate is 6% on the issue date. Required: 1. Compute the total bond interest expense over the bonds' life. 2. Prepare an effective interest amortization table for the bonds' life. 3. Prepare the journal entries to record the first two interest payments.
On January 1, Bramble Corp. issued 10 year, S6,000,000, 9% bonds for $6,842,830. The market rate of interest for these bonds is 79%. Interest is payable annually on December 31 (note that these bonds are ANNUAL bonds). Bramble uses the effective-interest method of amortizing bond premium. At the end of the second year, Bramble should report unamortized bond premium of Group of answer choices $722.000 $716,556 5691,933 $319,093
On January 1, 2022, Aaron Incorporated issued $1,530,000 par value, 6%, 7-year bonds (i.e., there were 1,530 of $1,000 par value bonds in the issue). Interest is payable semiannually each January 1 and July 1 with the first interest payment due at the end of the period on July 1. The issue price of the bonds based on a 12% market rate of interest is $1,103,360. Prepare the amortization table for the first 2 years, assuming Aaron uses the straight-line method. (Round each calculation to the nearest whole number and then use the rounded value for each subsequent calculation in the table.) Date January 1, 2022 July 1, 2022 January 1, 2023 July 1, 2023 January 1, 2024 Cash Interest Straight-Line Interest Discount/Premium Amortization Carrying Value
On January 1 of the current year, Barton Corporation issued 10%, 5-year bonds with a face value of $100,000. The bonds are sold for $95,000. The bonds pay interest semiannually on June 30 and December 31, and the maturity date is December 31, 5 years from now. Barton records straight-line amortization of the bond discount. The bond interest expense for the current year ended December 31 is a. $11,500 b. $5,000 c. $500 d. $11,000
Ellis Company issues 8.0%, five-year bonds dated January 1, 2021, with a $530,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $540,871. The annual market rate is 7.5% on the issue date. Required: 1. Compute the total bond interest expense over the bonds' life. 2. Prepare an effective interest amortization table for the bonds' life. 3. Prepare the journal entries to record the first two interest payments. Please need answer for all with working please answer do not waste time or question by holding attempt if you can otherwise skip
On March 1, 2024, Baddour, Incorporated, issued 10% bonds, dated January 1, with a face amount of $160 million. • The bonds were priced at $143.50 million (plus accrued interest) to yield 12%. • The price if issued on January 1 would have been $140.75 million. • Interest is paid semiannually on June 30 and December 31. Baddour's fiscal year ends September 30. Required: 1. to 3. What would be the amount(s) related to the bonds Baddour would report in its balance sheet, income statement and statement of cash flows for the year ended September 30, 2024? Note: Enter your answers in whole dollars. Negative amounts should be indicated by a minus sign. Balance sheet: Bonds payable (net) Interest payable Income statement: Interest expense Statement of cash flows:
On January 1, Shanghai Fashions issued $325,000 of 6%, 3-year bonds when the market rate of interest was 10%. The bonds pay interest semiannually on June 30 and December 31. A. How much are the proceeds that Shanghai Fashions Company will receive on the issue date of the bonds? B. Prepare an amortization table for the bond issue. C. If the bonds are retired at the end of Year 2 at 104.5% of the maturity value, how much gain or loss on retirement will be reported?
On January 1, 2025, Concord Corporation issued $500,000 of 7% bonds, due in 10 years. The bonds were issued for $537.196, and pay interest each July 1 and January 1. The effective-interest rate is 6%. Prepare the company's journal entries for (a) the January 1 issuance. (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Concord uses the effective interest method. (Round answers to 0 decimal places, eg, 38,548. If no entry is required, select "No Entry for the account titles and enter O for the amounts Credit account titles are automatically indented when the amount is entered. Do not indent manually List all debit entries before credit entries) No. (4) Date Account Titles and Explanation Debit Cred
On January 1, 2024, Wildhorse Co. issued eight-year bonds with a face value of $6010000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are: Present value of 1 for 8 periods at 10% 0.46651 Present value of 1 for 8 periods at 12% 0.40388 Present value of 1 for 16 periods at 5% 0.45811 Present value of 1 for 16 periods at 6% 0.39365 Present value of annuity for 8 periods at 10% Present value of annuity for 8 periods at 12% Present value of annuity for 16 periods at 5% Present value of annuity for 16 periods at 6% 5.33493 4.96764 10.83777 10.10590 The present value of the principal is O $2365837. O $2427319. O $2753241. O $2803725.
On January 1, 2024, Cullumber Co. issued eight-year bonds with a face value of $5920000 and a stated interest rate of 4%, payable semiannually on June 30 and December 31. The bonds were sold to yield 6%. Table values are: Present value of 1 for 8 periods at 4% Present value of 1 for 8 periods at 6% Present value of 1 for 16 periods at 2% Present value of 1 for 16 periods at 3% Present value of annuity for 8 periods at 4% Present value of annuity for 8 periods at 6% Present value of annuity for 16 periods at 2% Present value of annuity for 16 periods at 3% The present value of the principal is O $4312424. O $4325685. O $3714267. O $3689166. 0.73069 0.62741 0.72845 0.62317 6.73274 6.20979 13.57771 12.56110
Mango Co. issued bonds payable on January 1, 2022. Each $1,000 bond is convertible to 10 shares of common stock after January 1, 2024. The bonds have a 5-year term, a stated rate of 8%, and pay interest annually on January 1. The bonds were issued at a premium of $25,274 which provides an effective interest rate of 6%. (Hint: Prepare an amortization table for the five-year term of the bonds. Note that 2023 is the second year in the term of the bonds.) Prepare the adjusting entry at Dec. 31 , 2023.
On January 1, 2015, Solis Co. issued its 10% bonds in the face amount of $3,000,000, which mature on January 1, 2020. The bonds were issued for $3,405,000 with a rate of 8% and market rate of 5.5%, resulting in bond premium of $405,000. Solis uses the effective - interest method of amortizing bond premium. Interest is payable quarterly. Record the appropriate journal entries if you knew that they made all the interest payments for 2015 and prepare the amortization schedule. [Hint: watch out for the payment dates].