QUESTIONPart A) On January 1, 2023 its issue date, Diogenes Inc. purchased a 9%, $200,000, 10-year bond. Interest is paid annuallyon December 31. Diogenes uses the amortized cost model and the effective interest method for amortizing premium ordiscount. The current market rate was 10% and as a result Diogenes paid $187,711 for the bonds. On December 31, 2023,the bonds have a market value of $185,000. Diogenes applies IFRS.InstructionsRecord the receipt of interest for 2023.Part B)Zeus Corporation is considering making a significant long-term investment in Ares Ltd., a young and very promisingcompany. Zeus decides to make a smaller investment first, and if Ares turns out to be successful, Zeus intends to make anadditional investment to reach significant influence. Ares has 110,000 shares outstanding. On January 1, 2023, Ares issuesZeus 10,000 shares for $400,000 in cash (so now there are 120,000 shares outstanding).Additional information:1. On November 1, 2023, Ares declares a total cash dividend of $180,000.2. Ares reports $225,000 net income for 2023. Its stock price on December 31, 2023 is $38.3. On November 1, 2024, Ares announces a total dividend of $270,000 to be paid on January 2, 2025.4. Ares reports $360,000 net income for 2024. Its stock price on December 31, 2024 is $44.5. On March 15, 2025, Zeus is approached by an investment fund which offers to buy all its Ares shares for $55 per share,a 25% premium over the current stock price of $44. Zeus accepts the offer and sells the shares on that day.InstructionsAssuming Zeus uses the fair value through Other Comprehensive Income model (FV-OCI) to account for this investment:a) Prepare the journal entries in Zeus' books for the 2023 calendar year.b) Prepare the journal entries in Zeus' books for the 2024 calendar year.c) Prepare the journal entries in Zeus' books for the 2025 calendar year.Now assume Zeus uses the fair value through net income model (FV-NI) to account for this investment:a) Prepare the journal entries in Zeus' books for the 2023 calendar year.b) Prepare the journal entries in Zeus' books for the 2024 calendar year.c) Prepare the journal entries in Zeus' books for the 2025 calendar year.

The International Financial Reporting Standards (IFRS) comprise a collection of accounting…

Answered: QUESTION Part A) On January 1, 2023 its…

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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A company issues $17200000, 9.8%, 20-year bonds to yield 10% on January 1, 2020. Interest is paid on June 30 and December 31. The proceeds from the bonds are $16904864. Using effective-interest amortization, how much interest expense will be recognized in 2020? $1690484 $1690608 $842800 $1685600
What is the total amount of interest revenue that Redbud will recognize over the life of the bonds?
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Question. On April 1, 2023, King Company issued $400,000 of 5-year bonds. Interest is paid semi-annually on April 1 and October 1. Here is a partial amortization schedule for the first few years of the bond issue. Interest Payment Interest Expense Amortization Carrying Amount of Bonds Apr. 1, 2023 $418,444 Oct. 1, 2023 $8,000 $6,277 $1,723 416,721 Apr. 1, 2024 8,000 6,251 1,749 414,972 Oct. 1, 2024 8,000 6,225 1,775 413,197 Apr. 1, 2025 8,000 6,198 1,802 411,395 Oct. 1, 2025 8,000 6,171 1,829 409,566 Apr. 1, 2026 8,000 6,143 1,857 407,709 b) What is the bonds’ face value? c) What will the bonds’ carrying amount be at the maturity date? d) What will be the total interest payments over the five-year life of the bonds? Total interest expense? e) Prepare the journal entry to record the issuance of the bond. f) Prepare the journal entry for the first three interest payments. g) Prepare the adjusting journal entry on December 31, 2023, assuming this is King’s…
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Ayayai Company issues $ 17300000, 9.80%, 20-year bonds to yield 10% on January 1,2025. Interest is paid on June 30 and December The proceeds from the bonds are $ 17003148. Ayayai uses effective interest amortization. What amount of interest expense will Ayayai record for the June 30, 2025 payment? $ 1700314 $847700 $850157 $ 865000
A company issues $25900000, 5.8%, 20-year bonds to yield 6% on January 1, 2020. Interest is paid on June 30 and December 31. The proceeds from the bonds are $25301326. Using effective-interest amortization, what will the carrying value of the bonds be on the December 31, 2020 balance sheet? (Round answer to 0 decimal place, e.g. 52.) $25309264 $25900000 $25333047 $25317444
Subject: acounting
Kingbird corporation issued $460,000 ,8% 20 year bonds on January 1 2022 for $418,008. This price resulted in effective interest rate of 9 % on the bonds. Interest is payable annually on January 1 Kingbird uses the effective interest method to amortize bond premium or discount prepare the journal entry to record the accrual interest and the discount amortization on december 31,2022
Ma4. On June 30, 2022 Maxim Corp purchased 7%, $100,000 10 year bonds. Interest is paid annually on Dec 31. Maxim uses the amortized cost model and the effective interest method for amortizing any premium or discount. The current market rate was 8% and as a result Maxim paid $93,290 for the bonds. On December 31, 2022 the bonds have a market value of $90,000. The bonds had a market value of $93,000 on December 31, 2023. Assuming the company uses amortized cost to account for the investment, record the purchase of the bonds and the entries for 2022.
Ellis Company issues 6.5%, five-year bonds dated January 1, 2021, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $255,333. The annual market rate is 6% on the issue date. Required: 1. Compute the total bond interest expense over the bonds' life. 2. Prepare an effective interest amortization table for the bonds' life. 3. Prepare the journal entries to record the first two interest payments.
A company issues $17000000, 9.8%, 20-year bonds to yield 10% on January 1, 2024. Interest is paid on June 30 and December 31. The proceeds from the bonds are $16708295.53. If the effective-interest method of amortization is used, what amount of interest expense will be recognized in 2024? $833000 $1670756 $1670951 $1666000

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