On January 1, 2021, Ayayai Ltd. paid $238,831.09 for 12% bonds of Variation Ltd. with a maturity value of $222,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2021, mature on January 1, 2026, and pay interest each December 31. Ayayai acquired the bond investment as part of its portfolio of trading securities and it accounts for the bonds at FV-NI, following IFRS. At December 31, 2021, Ayayai's year end, the bonds had a fair value of $237,300.00. During 2022, the economic outlook related to Variation's primary business took a major downturn, so that Variation's debt was downgraded. By the end of 2022, the bonds were priced at 85.5, and at December 31, 2023, they were selling in the market at 87. Conditions reversed in 2024 and the outlook for Variation significantly improved, leaving its bonds with a fair value of 99.5 at December 31, 2024.
On January 1, 2021, Ayayai Ltd. paid $238,831.09 for 12% bonds of Variation Ltd. with a maturity value of $222,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2021, mature on January 1, 2026, and pay interest each December 31. Ayayai acquired the bond investment as part of its portfolio of trading securities and it accounts for the bonds at FV-NI, following IFRS. At December 31, 2021, Ayayai's year end, the bonds had a fair value of $237,300.00. During 2022, the economic outlook related to Variation's primary business took a major downturn, so that Variation's debt was downgraded. By the end of 2022, the bonds were priced at 85.5, and at December 31, 2023, they were selling in the market at 87. Conditions reversed in 2024 and the outlook for Variation significantly improved, leaving its bonds with a fair value of 99.5 at December 31, 2024.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject: acounting
Transcribed Image Text:On January 1, 2021, Ayayai Ltd. paid $238,831.09 for 12% bonds of Variation Ltd. with a maturity value of $222,000. The bonds
provide the bondholders with a 10% yield. They are dated January 1, 2021, mature on January 1, 2026, and pay interest each
December 31. Ayayai acquired the bond investment as part of its portfolio of trading securities and it accounts for the bonds at FV-NI,
following IFRS. At December 31, 2021, Ayayai's year end, the bonds had a fair value of $237,300.00.
During 2022, the economic outlook related to Variation's primary business took a major downturn, so that Variation's debt was
downgraded. By the end of 2022, the bonds were priced at 85.5, and at December 31, 2023, they were selling in the market at 87.
Conditions reversed in 2024 and the outlook for Variation significantly improved, leaving its bonds with a fair value of 99.5 at
December 31, 2024.
(a)
Prepare a bond amortization table for the four-year period ended December 31, 2024. (Round answers to 2 decimal places,
e.g. 52.75.)
Cash
Received
Bond Amortization Table
Interest
Income
Premium
Amortization
Carrying
Amount of Bonds
Transcribed Image Text:(a)
Prepare a bond amortization table for the four-year period ended December 31, 2024. (Round answers to 2 decimal places,
e.g. 52.75.)
Date
01/01/21
12/31/21
12/31/22
12/31/23
12/31/24
Cash
Received
$
Bond Amortization Table
Interest
Income
LA
Premium
Amortization
LA
Carryi
Amount of
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