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subject: accounting subject XYZ Company acquired 6,000,000 12% bonds on January 1, 2023. Interest is paid annually. According to the bond agreement, the bonds are to be paid off in three equal annual installments, starting on December 31, 2023. The effective interest rate for the bonds is 14%. The entity's business model involves collecting contractual cash flows. On August 1, 2024, the organization sold the bonds for 110 of their face value. 1. What is the present value of the bonds at the date of acquisition? 2. What is the carrying amount of the bonds before selling? Please make an amortization table.

subject: accounting subject XYZ Company acquired 6,000,000 12% bonds on January 1, 2023. Interest is paid annually. According to the bond agreement, the bonds are to be paid off in three equal annual installments, starting on December 31, 2023. The effective interest rate for the bonds is 14%. The entity's business model involves collecting contractual cash flows. On August 1, 2024, the organization sold the bonds for 110 of their face value. 1. What is the present value of the bonds at the date of acquisition? 2. What is the carrying amount of the bonds before selling? Please make an amortization table.

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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subject: accounting subject XYZ Company acquired 6,000,000 12% bonds on January 1, 2023. Interest is paid annually. According to the bond agreement, the bonds are to be paid off in three equal annual installments, starting on December 31, 2023. The effective interest rate for the bonds is 14%. The entity's business model involves collecting contractual cash flows. On August 1, 2024, the organization sold the bonds for 110 of their face value. 1. What is the present value of the bonds at the date of acquisition? 2. What is the carrying amount of the bonds before selling? Please make an amortization table.
Transcribed Image Text:subject: accounting subject XYZ Company acquired 6,000,000 12% bonds on January 1, 2023. Interest is paid annually. According to the bond agreement, the bonds are to be paid off in three equal annual installments, starting on December 31, 2023. The effective interest rate for the bonds is 14%. The entity's business model involves collecting contractual cash flows. On August 1, 2024, the organization sold the bonds for 110 of their face value. 1. What is the present value of the bonds at the date of acquisition? 2. What is the carrying amount of the bonds before selling? Please make an amortization table.
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