(a)(b)(c)Jan. 1, 2025Dec. 31, 2025Dec. 31, 2025Dec. 31, 2026Debt InvestmentsCashInterest ReceivableDebt InvestmentsInterest Revenue(To record interest received)Fair Value AdjustmentUnrealized Holding Gain or Loss - Equity(To record fair value adjustment)Unrealized Holding Gain or Loss - EquityFair Value Adjustment On January 1, 2025, Flounder Company purchased 11% bonds having a maturity value of $312,000 for $336,270.95. The bondsprovide the bondholders with a 9% yield. They are dated January 1, 2025, and mature January 1, 2030, with interest received onJanuary 1 of each year. Flounder Company uses the effective-interest method to allocate unamortized discount or premium. Thebonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows.2025 $333,900 2028$320,900 202920262027$320,000$321,800$312,000(a) Prepare the journal entry at the date of the bond purchase.(b)Prepare the journal entries to record the interest revenue and recognition of fair value for 2025.(c)Prepare the journal entry to record the recognition of fair value for 2026.(List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. Ifno entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to 2 decimal places, e.g. 1225.25.)

Answer : On Jan.1,2025 Debt investment = $336,270.95 On Dec.31,2025 Interest received =$312,000*11%…

Answered: vailable-for-sale category. The fair…

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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ACC298 Timed Practice Problem 1: Delish Company issued $500,000, 10%, 5-year bonds on January 1, 2022 for $480,000. Interest is payable annually on January 1. The company uses the straight-line method to amortize any bond premium or discount. Instructions: (a) Did these bonds issue at a Premium or at a Discount? (b) Prepare the journal entry to record the issuance of the bonds. (c) Calculate the amount of the first interest payment. (d) Calculate the amount of interest expense Delish would record on Dec. 31, 2022. (b) (c) Chapter 10
g 2021 Question 6 of 17 -/1 View Policies Current Attempt in Progress On October 1, 2020 Swifty Corporation issued 4%, 10-year bonds with a face value of $6000000 at 104. Interest is paid on October 1 and April 1, with any premiums or discounts amortized on a straight-line basis. The entry to record the issuance of the bonds would include a credit of O $120000 to Interest Payable. O $240000 to Discount on Bonds Payable. O $240000 to Premium on Bonds Payable. O $5760000 to Bonds Payable. Save for Later Attempts: 0 of 1 used Submit Answer MacBook Air
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QUESTION 5 On 1 January 2017, Entity A bought a $250,000 5.25% bond for $236,000. It incurred issue costs of $2,820. Interest is received in arrears. The bond will be redeemed at a premium over the face value on 31 December 2019. The effective interest rate is 8.75%. The fair value of the bond was as follows: 31 December 17 : $265,600 31 December 18 : $256,480 31 December 19 : $273,560 REQUIRED: (1) Measure the amounts recognised in the Statement of Financial Position for the financial asset on 31 December 2018 if Entity A originally planned to hold the bond until the redemption date. (2) Measure the amounts of Gain or Loss on remeasurement recognised in the Statement of Profit or Loss and Other Comprehensive Income for the financial asset for the year of 2018 if Entity A originally planned to hold the bond to maturity and may also sell the bond when the possibility of an investment with a higher return arises. (3) Measure the amounts of Gain or Loss on remeasurement…
PPODIENI2(TOPUIILS The Sleepy Corporation issued $1,000,000 of ten year bonds on January 1, 2019. The interest rate on the bonds is 9%, and the interest is paid semi-annually on July 1 and January of each year. The bonds were issued at 102. The straight-line method for amortizing discounts and premiums is used. a. Were the bonds issued at a discount or premium? b. Prepare the journal entries on 1. January 1, the date the bonds were issued December 31, 2019, for the year end journal entry to record interest expense and amortization of discount/premium 2. c. Calculate the total amount of interest expense on the 2019 income statement. d. Calculate the carry value of the bonds on December 31, 2019
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Problem 5-15 (AICPA Adapted) On July 1, 2020, Carol Company issued at 104, five thousand 10% bonds with face amount of P1,000 per bond. The bonds were issued through an underwriter to whom the entity paid bond issue cost of P125,000. On July 1, 2020, what is the carrying amount of the bonds payable? a. 4,875,000 b. 5,075,000 c. 5,200,000 d. 5,325,000
Exercise 10.9 (Algo) Accounting for Bonds Issued at a Premium: Issuance, Interest Payments, and Retirement (LO10-5, LO10-6) Xonic Corporation issued $8.5 million of 20-year, 8 percent bonds on April 1, 2021, at 102. Interest is paid on March 31 and September 30 of each year, and all of the bonds in the issue mature on March 31, 2041 Xonic's fiscal year ends on December 31. Prepare the following journal entries. a. April 1, 2021, to record the issuance of the bonds. b. September 30, 2021, to pay interest and to amortize the bond premium. c. March 31, 2041, to pay interest, amortize the bond premium, and retire the bonds at maturity (make two separate entries). Assume an adjusting entry was made on December 31, 2040, to recognize interest from October 1 to December 31. d. What is the effect of amortizing the bond premium on (1) annual net income and (2) annual net cash flow from operating activities. (ignore possible income tax effects.) (If no entry is required for a transaction/event,…

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vailable-for-sale category. The fair value of the bonds at December 31 of each year 2028 $321,800 2029 $312,000