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On January 1, Year 1, Company C purchased 10 of the $10,000 face value, 10%, 2-year bonds of Company D. The bonds mature on December 31, Year 2, and pay interest annually on December 31. Company C purchased the bonds to yield 12% and classified the bonds as held-to-maturity. The company's policy is to amortize the bonds' premium or discount according to the effective interest method. Information on present value factors is a as follows: Present value of $1 at 10% for two periods Present value of $1 at 12% for two periods Present value of an annuity of $1 at 10% for two periods Present value of an annuity of $1 at 12% for two periods 0.8264 0.7972 1.7355 1.6901 Enter the appropriate amounts in the designated cells below. Round all amounts to the nearest dollar. If no entry is necessary, enter a zero (O). Enter all amounts as positive values.

On January 1, Year 1, Company C purchased 10 of the $10,000 face value, 10%, 2-year bonds of Company D. The bonds mature on December 31, Year 2, and pay interest annually on December 31. Company C purchased the bonds to yield 12% and classified the bonds as held-to-maturity. The company's policy is to amortize the bonds' premium or discount according to the effective interest method. Information on present value factors is a as follows: Present value of $1 at 10% for two periods Present value of $1 at 12% for two periods Present value of an annuity of $1 at 10% for two periods Present value of an annuity of $1 at 12% for two periods 0.8264 0.7972 1.7355 1.6901 Enter the appropriate amounts in the designated cells below. Round all amounts to the nearest dollar. If no entry is necessary, enter a zero (O). Enter all amounts as positive values.

FINANCIAL ACCOUNTING
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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Item 1. The amount Company C paid for the bonds. 2. The amount of discount on the bonds on January 1, Year 1. 3. The amount of cash interest received by Company C during Year 1. 4. The amount of interest revenue recognized in Year 1 income statement. 5. The amount of the bonds' discount amortized in Year 1. 6. The carrying amount of the bonds presented in the December 31, Year 1, financial statements. Amount
Transcribed Image Text:Item 1. The amount Company C paid for the bonds. 2. The amount of discount on the bonds on January 1, Year 1. 3. The amount of cash interest received by Company C during Year 1. 4. The amount of interest revenue recognized in Year 1 income statement. 5. The amount of the bonds' discount amortized in Year 1. 6. The carrying amount of the bonds presented in the December 31, Year 1, financial statements. Amount
On January 1, Year 1, Company C purchased 10 of the $10,000 face value, 10% , 2-year bonds of Company D. The bonds mature on December 31, Year 2, and pay interest annually on December 31. Company C purchased the bonds to yield 12% and classified the bonds as held-to-maturity. The company's policy is to amortize the bonds' premium or discount according to the effective interest method. Information on present value factors is a as follows: Present value of $1 at 10% for two periods Present value of $1 at 12% for two periods Present value of an annuity of $1 at 10% for two periods Present value of an annuity of $1 at 12% for two periods 0.8264 0.7972 1.7355 1.6901 Enter the appropriate amounts in the designated cells below. Round all amounts to the nearest dollar. If no entry is necessary, enter a zero (0). Enter all amounts as positive values.
Transcribed Image Text:On January 1, Year 1, Company C purchased 10 of the $10,000 face value, 10% , 2-year bonds of Company D. The bonds mature on December 31, Year 2, and pay interest annually on December 31. Company C purchased the bonds to yield 12% and classified the bonds as held-to-maturity. The company's policy is to amortize the bonds' premium or discount according to the effective interest method. Information on present value factors is a as follows: Present value of $1 at 10% for two periods Present value of $1 at 12% for two periods Present value of an annuity of $1 at 10% for two periods Present value of an annuity of $1 at 12% for two periods 0.8264 0.7972 1.7355 1.6901 Enter the appropriate amounts in the designated cells below. Round all amounts to the nearest dollar. If no entry is necessary, enter a zero (0). Enter all amounts as positive values.
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