On January 01, 2024, ABC Corp. purchased XYZ Company bonds when the market interest rate was 6%. The XYZ bonds had a $600,000 maturity value, paid 4% interest semi-annually on June 30th and December 31st, and had a six year life. ABC Corp.'s year-end is at December 31. ABC Corp uses IFRS for reporting purposes and has classified this investment as an Amortized Cost (AC) investment for financial reporting purposes. Please refer to the PV tables provided in the course Required: a) Calculate the price paid by ABC Corp. for the bonds. b) Prepare the journal entry to record the purchase of the bonds. c) Complete the table below that shows the interest revenue, carrying value of bonds, using the effective interest method. Period Cash Payment Interest Revenue 0 a. e. 1 2 i 3 m. b. f. j. n. Amortization Carry Value d. h. L p. C. g. k. O. d) Provide the journal entry to record the interest revenue on June 30, 2024. e) Explain the major difference in accounting treatments between AC investments and FVOCI Investments (ie: what do we need to do for FVOCI investments that we don't need to do for AC investments) - no calculations required for this part.

On January 01, 2024, ABC Corp. purchased XYZ Company bonds when the market interest rate was 6%. The XYZ bonds had a $600,000 maturity value, paid 4% interest semi-annually on June 30th and December 31st, and had a six year life. ABC Corp.'s year-end is at December 31. ABC Corp uses IFRS for reporting purposes and has classified this investment as an Amortized Cost (AC) investment for financial reporting purposes. Please refer to the PV tables provided in the course Required: a) Calculate the price paid by ABC Corp. for the bonds. b) Prepare the journal entry to record the purchase of the bonds. c) Complete the table below that shows the interest revenue, carrying value of bonds, using the effective interest method. Period Cash Payment Interest Revenue 0 a. e. 1 2 i 3 m. b. f. j. n. Amortization Carry Value d. h. L p. C. g. k. O. d) Provide the journal entry to record the interest revenue on June 30, 2024. e) Explain the major difference in accounting treatments between AC investments and FVOCI Investments (ie: what do we need to do for FVOCI investments that we don't need to do for AC investments) - no calculations required for this part.

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

Cc. 173.
Subject: acounting
14. Determine the numerical value of the factor (F/A, 5%, 10). A 0.1295 0.0795 12.5779 D 7.7217 B.
Question 3: When is an employer NOT required to file a quarterly Form 941? Answer: А. O When annual tax liability for federal income, Social Security, and Medicare tax is less than $1,000 В. O When annual tax liability for federal income, Social Security, and Medicare tax is less than $1,500 С. O When annual tax liability for federal income, Social Security, and Medicare tax is less than $2,500 D. When annual tax liability for federal income, Social Security, and Medicare tax is less than $100,000
Bumgardner Incorporated has provided the following data concerning one of the products in its standard cost system. Inputs Direct materials Standard Quantity or Hours per Unit of Output 8.0 liters Standard Price or Rate $ 5.00 per liter The company has reported the following actual results for the product for April: Actual output Raw materials purchased 7,400 units 65,400 liters $ 5.70 per liter 59,210 liters Actual price of raw materials Raw materials used in production The raw materials price variance for the month is closest to: (Round your intermediate calculations to 2 decimal places.)
The following information is provided for the first month of operations for Legal Services Inc.: A. The business was started by selling $103,000 worth of common stock. B. Six months' rent was paid in advance, $4,100. C. Provided services in the amount of $1,500. The customer will pay at a later date. D. An office worker was hired. The worker will be paid $277 per week. E. Received $520 in payment from the customer in "C". F. Purchased $300 worth of supplies on credit. G. Received the electricity bill. We will pay the $120 in thirty days. H. Paid the worker hired in "D" for one week's work. I. Received $130 from a customer for services we will provide next week. J. Dividends in the amount of $1,800 were distributed. Prepare the necessary journal entries to record these transactions. If no entry is required, select "No Entry Required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank. A. B. 111
un.3
9. Joba Corporation issued $1,000,000 of 13% (stated rate) bonds payable on January 1, 2020, due on January 1, 2028, with interest payable each January 1. Investors require an effective-interest rate (market rate) of 10%. Calculate the amount of discount or premium that will be recognized when the company issues the bonds (indicate the amount and wither its discount or premium).
Now, assume that the state of the limit order book is as follows just before the call of CBA's opening call auction: Buy Quantity Price $8.08 $8.01 $7.99 $7.96 $7.91 $7.87 $7.84 $7.82 0 0 0 a. $7.96 O b. $8.01 O c. Other O d. $7.99 e. $7.91 1800 800 1100 1900 800 Sell Quantity 1600 1800 1200 0 0 0 0 If no more orders are entered, the call price would be:
Round 1.1235 to the nearest tenth. O 1.12 O 1.2 1.0 1.1