On June 1, 2019, YODA CORP. acquired a 5-year, 10%, P1,000,000 face value bonds at 92. The company paid broker's fees and non-refundable taxes amounting to P118,896. As a result, yield rate on the bond was 9%. Interests are collectible annually every May 31. The bonds were selling at 120, 105, 98 as of December 31, 2019, December 31, 2020 and December 31, 2021; respectively. On September 30, 2021, YODA sold P250,000 face value bonds for a total cost of P280,000. Case 1: Answer the following questions assuming the company classifies the investment as financial assets at amortized cost:

On June 1, 2019, YODA CORP. acquired a 5-year, 10%, P1,000,000 face value bonds at 92. The company paid broker's fees and non-refundable taxes amounting to P118,896. As a result, yield rate on the bond was 9%. Interests are collectible annually every May 31. The bonds were selling at 120, 105, 98 as of December 31, 2019, December 31, 2020 and December 31, 2021; respectively. On September 30, 2021, YODA sold P250,000 face value bonds for a total cost of P280,000. Case 1: Answer the following questions assuming the company classifies the investment as financial assets at amortized cost:

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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On January 1, 2020, Aspin Company purchased $1,200,000, 14% bonds of Bulldog Company for $1,381,934, a price that yields 10%. Interest on these bonds is payable every December 31. The bonds mature on December 31, 2024. Market value of the bonds on different dates is as follows: December 31, 2020 112 December 31, 2021 108 December 31, 2022 105 Assume that the company intended to collect the principal and interest over the term of the bonds and did not choose the fair value option. At what amount should the bond investments be shown on December 31, 2020 statement of financial position?
On January 1, 2019, Hyde Corporation purchased bonds with a face value of $300,000 for $308,373.53. The bonds the due June 30, 2022, carry a 13% stated interest rate,and were purchased to yield 12%. Interest is payable semiannually on June 30 and December 31. On March 31, 2020 in contemplation of a major aqusition, the company sold one-half the bonds for $159,500 including accrued interest; the remainder were held until maturity.Prepare the journal entries to record the purchase of the bonds, each interest payment the partial sale of the investment on March 31, 2020, and the retirement of the bond issue on June 30, 2022.
On January 1, 2021, Mega Corporation purchased P1,000,000, 12% bonds for P1,065,000, a price that yields 10%. the bonds pay interest semi-annually every January 1 and July 1 and they mature on January 1, 2025. Mega designates this debt investment at fair value through profit or loss. At December 31, 2021, each P1,000 bond is selling at 105.5. What is the carrying value of the debt investment at December 31, 2021? a.) P1,065,000 b.) P1,055,000 c.) P1,051,163 d.) P1,000,000
On January 1, 2021, Lambda, Inc. issued ten-year bonds with a face value of $1,000,000 and an annual stated interest rate of 8%. Interest payments are made semi-annually on June 30th and December 31st. The bonds were issued for $875,378, when the market rate of interest was 10%. What amount of interest expense will Lambda record for 2021? Multiple Choice $43,957 $92,462 $80,000 $87,726
Bridgeport Co. sells $426,000 of 12% bonds on June 1, 2020. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2024. The bonds yield 10%. On October 1, 2021, Bridgeport buys back $140,580 worth of bonds for $145,580 (includes accrued interest). Give entries through December 1, 2022.Prepare all of the relevant journal entries from the time of sale until December 31, 2022. Do not give answer in image formate
On July 1, 2020, Kwek-kwek Company issued 600 of its 10%, P1,000 bonds at 99 plus accrued interest. The bonds are dated April 1, 2020 and mature on April 1, 2029. Interest is payable semi-annually on April 1 and October 1. What amount did Kwek-kwek Company receive from the bond issuance? A. 579,000 B. 594,000 C. 609,000 D. 600,000
On January 1, 2016, Malibu Co. purchased 1,000,000 10% bonds designated as financial asset at amortized cost. The bonds were purchased to yield 12%. Interest is payable annually every December 31. The bonds mature on December 31, 2020. On December 31, 2016, the bonds were selling at 99. On January 2, 2018, Malibu Co. sold 500,000 face value bonds at 101. The bonds were selling at 103 on December 31, 2018. 1. How much is the purchase price of the bonds on January 1, 2016? 2. How much is the carrying amount of the investments in bonds on December 31, 2016? 3. How much is the realized gain on sale of the investment in bonds on January 2, 2018? 4. How much should be reported as unrealized gain or loss as component of equity on December 31, 2018? 5. If the entity elected the fair value option, how much should be recognized as unrealized gain for 2016?
On March 1, 2024, Baddour, Incorporated, issued 10% bonds, dated January 1, with a face amount of $160 million. The bonds were priced at $141.50 million (plus accrued interest) to yield 12%. • The price if issued on January 1 would have been $138.75 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) Financing activities Interest payable Income statement: Interest expense Statement of cash flows: $ 160,000,000 (18,500,000) 141,500,000 12,735,000
On January 1, 2018, Paradiso Company issued 1,000 of its 8%, $1,000 bonds at 93. Interest is payable semiannually on June 30 and December 31. The bonds will mature on December 31, 2027. If the company uses straight-line amortization, determine the amount of interest expense for 2018. answer is 87,000 how do you get there?
On March 1, 2021, FLAXSEED Inc. issued at 97, including accrued interest, 2,550 of its 10%, ₱1,000 bonds. The bonds are dated January 1, 2021 to mature on January 1, 2031. Interest is payable semi-annually on January 1 and July 1. From the bond issuance, how much cash did FLAXSEED receive? (Solution must be in good accounting form. Excel format would be good for a good accounting form! Thanks a lot, Tutor! I hope you can help me)
On January 1, 2021, Canada Corp. purchased bonds with a face value of P7,500,000 and a stated interest rate of 10% per year payable semi-annually every June 30 and December 31. The bonds were acquired to yield 11%. These were recorded as financial assets at amortized cost. On July 31, 2024, the bonds were sold at 111 including accrued interest. How much is the purchase price of the bonds? Round off to the nearest whole number.
On June 1, 2020, LM company purchased debt investment at amortized cost, 8,000 of P1,000 face value bonds for P7,383,000. The bonds were purchased to yield 10%. Interest is payable semi-annually on December 1 and June 1. On June 1, 2021, LM sold the bonds for P7,850,000. This amount includes the appropriate accrued interest. How much is the gain or loss on the sale of the debt investment?

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