Quail Company had an investment in bonds purchased at par for P8,000,000. On December 31, 2018, the remaining life of the bonds is 3 years with an annual interest payment at 10% payable at the end of each year. The issuer was facing a tough economi environment and informed all of the investors that it will be unable to make all payments according to the contractual terms. The entity had projected the expected cash flow for this investment to be P1,000,000 or December 31, 2019, P2,000,000 on December 31, 2020 and P6,000,000 on December 31, 2021. The market rate of interest is 12% for 2018. In connection with your audit, how much is the interest income for the year ended December 31, 2019?

Komissarov Company has a debt investment in the bonds issued by Keune Inc. The bonds were purchased at par for $400,000 and, at the end of 2020, have a remaining life of 3 years with annual interest payments at 10%, paid at the end of each year. This debt investment is classified as held-for-collection. Keune is facing a tough economic environment and informs all of its investors that it will be unable to make all payments according to the contractual terms. The controller of Komissarov has prepared the following revised expected cash flow forecast for this bond investment. Dec. 31   Expected Cash Flows 2021   $ 35,000 2022   35,000 2023     385,000 Total cash flows   $455,000 Instructions  a. Determine the impairment loss for Komissarov at December 31, 2020.  b. Prepare the entry to record the impairment loss for Komissarov at December 31, 2020.  c. On January 15, 2021, Keune receives a major capital infusion from a private equity investor. It informs Komissarov that the…

On January 1, 2023, Pronghorn Limited pays $105,753 to purchase $110,000 of Chan Corporation 9% bonds. The market rate of interest at the time was 10%. Pronghorn accounts for this investment at amortized cost using the effective interest method. The bonds mature on January 1, 2028, and interest is payable each July 1 and January 1. Note that the bond is acquired on an interest payment date and there is therefore no accrued interest for Pronghorn to pay on January 1. Pronghorn has an August 31 year end (a) * Your answer is incorrect. Calculate the amortization of the discount per month using the straight-line method. (Round answer to 2 decimal places, eg 125.55) SUPPOR

On January 1, 2023, Waterway Corporation purchased a $1,230,000 bond issued by ALN Ltd. The bond was due to mature on December 31, 2025, and paid interest at 6% every June 30 and December 31. The market interest rate was 8%. Waterway had both the intention and ability to hold the bond until its maturity date. On January 1, 2025, Waterway became aware that ALN was experiencing severe financial difficulties. After discussing the situation with ALN and some of the other creditors, Waterway believed that ALN would now be able to repay only $1, 107,000 of the original $1,230,000 bond. (The tables in this problem are to be used as a reference for this problem.) Calculate the purchase price of the bond using A-2 and A-4 Tables, a financial calculator or Excel functions. (Round factor values to 5 decimal places, eg. 1.25124 and final answer to 2 decimal places, e. g. 5,275.36.)