On January 1, 2025, Sheffield Company purchased $410,000, 8% bonds of Aguirre Co, for $378,339. The bonds were purchased toyield 10% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2030. Sheffield Companyuses the effective-interest method to amortize discount or premium. On January 1, 2027, Sheffield Company sold the bonds for$380,070 after receiving interest to meet its liquidity needs.

Let's break down the information and calculate the necessary values: 1. Purchase of Aguirre Co.…

Answered: On January 1, 2025, Sheffield Company…

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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An investor company purchased $427,000 of 8% bonds from the investee company on January 1, 2020, with interest payable on December 31. The bonds were classified as Available-for-Sale. The bonds sold for $706,390. Using the effective-interest method, the investor company revised the Available-for-Sale Debt Securities account on December 31, 2020 and December 31, 2021 by the amortized discount/premium of $6,470. and $8,200, respectively. At December 31, 2020, the fair value of the investee company bonds was $912,000. At December 31, 2021, the fair value of the investee company bonds was $843,000. What is the amount of unrealized holding gain/loss related to this investment in 2021? (Very important: Just enter the amount. DO NOT put a plus or minus sign in front of the amount.)
On January 1, 2017, Sarasota Corporation purchased 331 of the $1,000 face value, 9%, 10-year bonds of Walters Inc. The bonds mature on January 1, 2027, and pay interest annually beginning January 1, 2018. Sarasota purchased the bonds to yield 11%. How much did Sarasota pay for the bonds?
On January 1, 2023, Liu Corporation paid $242,952 to acquire bonds of Singh Investment Corp with a par value of $241,000. The annual contract rate on the bonds is 6.5% and interest is paid semiannually on June 30 and December 31. The bonds mature after three years. The market rate of Interest was 6.2%. Liu Corporation intends to hold the bonds until maturity. Required: 1. Prepare an amortization schedule for the investment showing only 2023. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. Enter all the amounts as positive values.) Cash Period Interest Period Ending Premium Amort. Interest Received Income Unamortized Premium Carrying Value Jan. 1/23 June 30/23 Dec. 31/23
On April 1, 2020 Everjoy Company purchased $80,000 of Miller Corporation's 6% bonds at a purchase price of 96. At the time of purchase the market rate of interest was 8%. Everjoy Company, whose year end is December 31, expects to hold the bonds until their maturity date 5 years from the date of purchase. Interest on the bonds will be paid every April 1 and October 1 until maturity. What is the carrying value (amortized cost) of the bond that Everjoy Company would report on October 1, 2020? O $78,144 O $77,120 O $79,488 O $77,472 O None of the above.
On January 1, 2020, Splish Company purchased $300,000, 6% bonds of Cabana Co. for $313,128. The bonds were purchased to yield 5% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2025. Splish Company uses the effective-interest method to amortize discount or premium. On January 1, 2022, Splish Company sold the bonds for $305,400 after receiving interest to meet its liquidity needs.
Krause Corporation issued $2,600,000, 10-year, 5% bonds for $2,470,000 on January 1, 2019. Interest is paid semiannually on January 1 and July 1. The corporation uses the straight-line method of amortization. Krause's fiscal year ends on December 31. The amount of discount amortization on July 1, 2019, would be A. $130,000 B. $13,000 C. $6,500 D. $130,000
Arrieta Company purchased $2,250,000 of 8% bonds of Baez Company on January 1, 2023, paying $1,969,601. The bonds mature January 1, 2033; interest is payable each July 1 and January 1. The effective yield on the bonds is 10%. Arietta Company uses the effective-interest method and plans to hold these bonds to maturity. What journal entry is made by Arrieta Company on January 1, 2023?
Nates corporation issued $1,500,000 of 11% of bonds at 97 on Jan 2,2019. Interest is paid semiannually on June 30 and December 31. The bonds had a 10-year life from the date of issue, and the company uses the straight-line method of amortization. On April 30, 2021, Balboa recalls the bonds at the call price of 105 plus accrued interest. Journal entries for 2021 would include:
On July 1, 2020, West Company purchased for cash, ten $10,000 bonds of North Corporation at a market rate of 6%. The bonds pay 5% interest, payable on a semiannual basis each July 1 and January 1, and mature on July 1, 2023. The bonds are classified as trading securities. The annual reporting period ends December 31. Assume the effective interest method of amortization of any discounts or premiums. Ignore income taxes. a. Prepare a bond amortization schedule for the life of the bonds using the effective interest method. Note: Round each amount entered into the schedule to the nearest whole dollar. Use the rounded amount for later calculations in the schedule. Adjust market interest in the final year of the bond term for any net rounding difference.
JSM Ltd. sold $6,010,000 of 8% bonds, which were dated March 1, 2023, on June 1, 2023. The bonds paid interest on September 1 and March 1 of each year. The bonds' maturity date was March 1, 2033, and the bonds were issued to yield 10%. JSM's fiscal year-end was February 28, and the company followed IFRS. On June 1, 2024, JSM bought back $2,010,000 worth of bonds for $1,910,000 plus accrued interest. (a) Your answer is partially correct. Using 1. a financial calculator, or 2. Excel function PV, calculate the issue price of the bonds and prepare the entry for the issuance of the bonds. Hint: Use the account Interest Expense in your entry). (Round answer to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Cash Debit Credit Interest…
On January 1, 2020, Sheridan Company sold 9% bonds with a face value of $2100000. The bonds mature in five years, and interest is paid semiannually on June 30 and December 31. The bonds were sold for $2274700 to yield 7%. Using the effective-interest method of amortization, interest expense for 2020 is $158709. $189000. $159179. $147000.
Subject: acounting

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