Answered: What is the interest income for the…

Business

Accounting

What is the interest income for the year 2021?

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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On January 1, 2020, Kingbird Corporation purchased 325 of the $1,000 face value, 11%, 10-year bonds of Walters Inc. The bonds mature on January 1, 2030, and pay interest annually beginning January 1, 2021. Kingbird purchased the bonds to yield 11%. How much did Kingbird pay for the bonds?
On Jan. 1, 2021, ABC bought serial bonds with a face value of P2,400,000 for P2,160,000 cash. The investment will be accounted for as a financial asset at amortized cost. It will be paid in installments of P800,000 plus 10% interest on the outstanding balance every Dec. 31, 2021. On Dec. 31, 2021, the remaining bonds have a fair value of PP1,550,000. What is the Investment in Bonds as of acquisition?
A company issues $25200000, 7.8%, 20-year bonds to yield 8% on January 1, 2020. Interest is paid on June 30 and December 31. The proceeds from the bonds are $24701221. Using effective-interest amortization, how much interest expense will be recognized in 2020?
On January 1, 2020, Aspin Company purchased $1,200,000, 14% bonds of Bulldog Company for $1,381,934, a price that yields 10%. Interest on these bonds is payable every December 31. The bonds mature on December 31, 2024. Market value of the bonds on different dates is as follows: December 31, 2020 112 December 31, 2021 108 December 31, 2022 105 Assume that the company intended to collect the principal and interest over the term of the bonds and did not choose the fair value option. At what amount should the bond investments be shown on December 31, 2020 statement of financial position?
On January 1,2019, DEF Company purchased 456B Corporation, 9% bonds with a face value of P 4,000,000 for P 3,756,000. The debt investments are carried at amortized cost. The debt investments are carried at the amortized cost. The effective interest rate at that time is 10%. The bonds are dated January 1,2019and mature on December 31,2028. The bonds pay interest annually on December 31.Market quotation for the debt investment at December 31,2019 is 99. What is the interest revenue for the year 2019?
On January 1, 2021, Mega Corporation purchased P1,000,000, 12% bonds for P1,065,000, a price that yields 10%. the bonds pay interest semi-annually every January 1 and July 1 and they mature on January 1, 2025. Mega designates this debt investment at fair value through profit or loss. At December 31, 2021, each P1,000 bond is selling at 105.5. What is the carrying value of the debt investment at December 31, 2021? a.) P1,065,000 b.) P1,055,000 c.) P1,051,163 d.) P1,000,000
On June 30, 2019, ABC acquired a non-interest bearing, 3-year, P6,000,000 face value serial bonds for P4,800,000. The principal is due every June 30. What is the interest income for the year 2020? Solutions must be explained step by step.
(E) On Jan. 1, 2021, ABC acquired a 10%, P5,000,000, bonds that matures on Jan. 1, 2025. The interest is collectible every July 1 and Jan 1. It paid P4,689,510 for the acquisition resulting to an effective interest rate of 12%. What is the interest income for the year 2021?
On January 1, 2019, Bixby Inc. acquired an investment classified as FVOCI for P2,159,708, which has a principal amount of P2,000,000 and with 10% interest payable every December 31 starting 2019. The investment runs in three years. The fair value of the bonds are: December 31, 2019 - 102; December 31, 2020-98; December 31, 2021 - 101. Which of the following statements is true? O Other comprehensive income increased by P92,484.64 on year 2019. O None of these O Other comprehensive income decreased by P91,753.33 on year 2021. O Other comprehensive income increased by P50,598.77 on year 2020.
Dahlia Company purchased a P2,000,000 12% face value bonds, 10 years, on April 1, 2019 for P1,964,600. The bonds are dated April 1, 2019 with interest payable April 1 and October 1. Bond discount is amortized following the effective interest method. The effective interest rate is 12.40%. What is the total amortization for the year 2019? (Answer should be in two decimal places, no comma or peso sign) *
On January 1, 2026, ABC purchased 9% bonds with a face amount of P4M to yield 10%. The bonds are dated January 1, 2026, 2024, mature on December 31, 2035 and pay interest annually on December 31. The entity used the interest method. What should be reported as interest revenue for 2026?
1. Assuming the investment is appropriately recognized as a financial asset intended to collect contractual cash flows and also to sell the bonds in open market: How much interest income is to be recognized in 2021?