Please Solve In 20mins Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S.GAAP to prepare consolidated financial statements. Ignore income taxes.Izmir A.S. İssued convertible bonds at their face value of 109,000 lira on December 31, 2020. The bonds have a 10-year life withinterest of 10 percent payable annually. At the date of issue, the prevalling interest rate for similar debt without a conversion optionwas 12 percent.Required:a. Prepare journal entries for this campound financial Instrument for the year ending December 31, 2020, under (1) IFRS and (2) U.S.GAAP.b. Prepare the entrylies) that the U.S. parent would make on the December 31, 2020, conversion worksheet to convert IFRSbalances to U.S. GAAP.Complete this question by entering your answers in the tabs below.Required A Required BPrepare journal entries for this compound financial instrument for the year ending December 31, 2020, under (1) IFRS and (2) U.S.GAAP. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round PV factor to 7decimals. Round your intermediate and final answers to nearest whole dollar.)

Bonds are priced by discounting future cash flows. Future cash flows include coupons and par value…

Answered: Solve In 20mins

Business

Accounting

Solve In 20mins

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 20QTD

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Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U S GAAP to prepare consolidated financial statements. Ignore income taxes. Izmir A.S. issued convertible bonds at their face value of 109,000 lira on December 31, 2020. The bonds have a 10-year life with intelest of 10 percent payable annually. At the date of issue, the prevailing interest rate for similar debt without a conversion option was 12 percent. Required: a. Prepare journal entries for this compound financial instrument for the year ending December 31, 2020, under (1) IFRS and (2) U.S. GAAP. b. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020, conversion worksheet to convert IFRS balances to U.S. GAAP. nces Complete this question by entering your answers in the tabs below. Required A Required B Prepare journal entries for this compound financial instrument for the year ending December 31, 2020, under (1) IFRS and (2) U.S.…
Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes for given problem. Izmir A.S. issued convertible bonds at their face value of 100,000 lira on December 31, 2017. The bonds have a 10-year life with interest of 10 percent payable annually. At the date of issue, the prevailing interest rate for similar debt without a conversion option was 12 percent.a. Determine the appropriate accounting for this compound financial instrument for the year ending December 31, 2017, under (1) IFRS and (2) U.S. GAAP. b. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2017, conversion worksheet to convert IFRS balances to U.S. GAAP.
Izmir A.S. issued convertible bonds at the face value of 113,000 lira on December 31, 2017. The bonds have a 10-year life with interest of 12 percent payable annually. At the date of issue, the prevailing interest rate for similar debt without a conversion option was 14 percent. Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated finanacial statements. Ignore income taxes. Required; a. Prepare journal entries for this compound financial instrument for the year ending December31, 2017, under (1) IFRS and (2) U,S. GAAP. b. Prepare the entries that the U.S. parent would make on the December 31, 2017, conversion worksheet to convert IFRS balances to U.S. GAAP
tzmir A.S. issued convertible bonds at their face value of 113.000 lira on December 31. 2017. The bonds have a 10-year life with interest of 12 percent payable annually. At the date of issue, the prevailing interest rate for similar debt without a conversion option was 14 percent. Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be coverted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes. Required: a. Prepare journal entries for this compound financial instrument for the year ending December 31. 2017, under (1) IFRS and (2) U.S. GAAP. b. Prepare the entry(ies) that the U.S. parent would make on the December 31. 2017, conversion worksheet to convert IFRS balances to U.S. GAAP
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On March 1, 2021, Navy Corporation used excess cash to purchase U.S. Treasury bonds for $103,000 plus accrued interest. The bonds were purchased at face value. The appropriate interest rate is 6%. Interest on these bonds is payable on January 1 and July 1 of each year. Navy's investment is accounted for as held-to-maturity. The fair value of the Treasury bonds is $104,000 at year-end.Required:Prepare the appropriate journal entries to record the transactions for the year, including any year-end adjustments. Record the purchase of U.S Treasury bonds for cash and accrued interest. Record the cash received for interest revenue and receivable. Record the entry for interest received.
On January 1, 2020, ABC Co. borrowed P5,000,000 from a bank at a variable rate of interest for 4 years. Interest will be paid annually to the bank on December 31, and the principal is due on December 31, 2023. Under the agreement, the market rate of interest on each January 1 resets the variable rate for that period and the amount of interest to be paid on December 31. To protect itself from fluctuations in interest rate, the entity hedged the variable interest by entering into a four-year “receive variable, pay fixed” interest rate swap with a speculator. The interest rate swap s based on the notional amount of P5,000,000 and an 8% fixed interest rate. This agreement means that the entity will receive a swap payment from the speculator if the market rate on January 1 is more than 8% and will make a swap payment to the speculator if the market rate on January 1 is lower than 8%. The swap payments are made at the end of each year. The entity has designated this interest rate swap as…
Entity A is listed in Hong Kong. It is a toy manufacturer which commenced its business more than thirty years. On 1 July 2018, Entity A bought a $3,500,000 5.25% bond for $3,650,000. It also incurred an issue cost of $2,312. Entity A paid the bond price by a direct bank transfer on the purchase date. The issue cost was settled on 16 July 2018. Fixed interest is received in arrears. The bond will be redeemed at a premium over its face value on 30 June 2021. Entity A intended to hold the bond until maturity. The fair value option was not elected at the initial recognition. The fair values of the bond were as follows: 30 June 2019 $3,980,000 30 June 2020 $3,560,000 30 November 2020 $3,250,000 31 December 2020 $3,350,000 30 June 2021 $4,365,400 The effective interest rate is 8.25%. The market environment is stable and credit risk-free. The end of the reporting period is 30 June. REQUIRED: According to relevant accounting standards, prepare journal entries to recognise the…
On 1 January 2020, Rambutan Bhd issued RM10,000,000 million of its 5-year, 5% bond for RM9,179,960.51. The bonds were priced to yield 7%. Interest is payable annually in arrears. Rambutan Bhd elected the option to report these bonds at their fair value on the basis that these bonds are used to fund a group of assets that are measured at fair value. On 31 December 2020, the market interest rate for bonds of similar risk and maturity was RM9,520,500 as determined by their market value over-the-counter market. Rambutan Bhd determined that RM200,000 of the increase in fair value was due to a decline in general interest rates. Required: (i) Discuss the reason and implication of electing the option to report issuance of bond at their fair value. (ii) Prepare the journal entry to record interest expense on 31 December 2020, (iii) Prepare the journal entry to adjust the bonds to their fair value for presentation in the statement of financial position as at 31 December 2020. Explain your…
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