Use the following partial bond amortization schedule to answer the question. Given information: A corporation issues $100,000 of bonds oh January 1, 2021. The bonds have a 10-year term and pay interest semiannually on June 30 and December 31 each year. What is the carrying value of the bonds as of December 31, 2021? (1) (2) Date 1/1/2021 6/30/2021 12/31/2021 6/30/2030 12/31/2030 Cash Paid Face Amount x Stated Rate $3,500 3,500 3,500 3,500 (3) Interest Expense Carrying Value x Market Rate $3,728 3,737 3,962 3,981 (4) Increase in Carrying Value (3) - (2) $228 237 462 481 (5) Carrying Value Prior Carrying Value + (4) $ 93,205 93,433 93,670 99,057 99,519 100,000
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Carrying value of the bond is the amount which is written in the statement of financial position or in the books of accounts at the reporting date.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
