● ● What is the amount related to the bonds that Omar will report in its balance sheet at December 31, 2024? What is the amount related to the bonds that Omar will report in its income statement for the year ended December 31, 2024? (Ignore income taxes.) What is the amount related to the bonds that Omar will report in its statement of cash flows for the year ended December 31, 2024? Be sure to list the category, activity in which the cash flow is in. activities activities

● ● What is the amount related to the bonds that Omar will report in its balance sheet at December 31, 2024? What is the amount related to the bonds that Omar will report in its income statement for the year ended December 31, 2024? (Ignore income taxes.) What is the amount related to the bonds that Omar will report in its statement of cash flows for the year ended December 31, 2024? Be sure to list the category, activity in which the cash flow is in. activities activities

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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Question

Omar Company issued 7% bonds, dated January 1, with a face amount of $1,00,000 on January
1, 2024. The bonds sold for $913,540 and mature in 2038(15 years). For bonds of similar risk and
maturity the market yield was 8%. Interest is paid semiannually on June 30 and December 31.
Assume Omar determines interest at the effective rate.
(Do not add dollar sign; do not add comma by yourself to your amount; round the answer to the
whole number,
use minus sign if the amount is negative)
Answer the following questions:
What is the amount related to the bonds that Omar will report in its balance sheet at
December 31,
2024?
What is the amount related to the bonds that Omar will report in its income statement
for the year ended December 31, 2024? (Ignore income taxes.)
What is the amount related to the bonds that Omar will report in its statement of cash
flows for the year ended December 31, 2024? Be sure to list the category, activity in
which the cash flow is in.
activities
activities
Assume Sunset Company purchased this entire bond issue sold by Omar, i.e., 7% of $1,000,000
bonds, at $913,540 on January 1,2024. Market yield was 8% and interest is paid semiannually on
June 30 and December 31. Sunset is holding the bond investment as trading securities. The fair
value of the bonds on December 31, 2024 is $920,000.
1. At what amount will Sunset report this investment in the December 31, 2024 balance
sheet
2. What is the amount related to the bond investment that Sunset will report in its income
statement for the year ended December 31, 2024? (Ignore income taxes.)
3. What is the amount related to the bond investment that Sunset will report in its statement
of cash flows for the year ended December 31, 2024? Be sure to list the category of
activity in which the cash
Flow is in.
activities
activities

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