Chapter 12, Problem 12.2E

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Based on the information below, I have to prepare the adjusting entry at December 31, 2022 to report the securities at fair value. Thank you in advance!

The balance sheet at December 31, 2021, for Nevada Harvester Corporation Includes the liabilitles listed below: a. 10% bonds with a face amount of $42 million were Issued for $42 million on October 31, 2012. The bonds mature on October 31, 2032. Bondholders have the option of calling (demanding payment on) the bonds on October 31, 2022, at a redemption price of $42 million. Market conditions are such that the call is not expected to be exercised. b. Management Intended to refinance $8.7 million of Its 9% notes that mature In May 2022. In early March, prior to the actual issuance of the 2021 financial statements, Nevada Harvester negotlated a line of credit with a commercial bank for up to $6.5 million any time during 2022. Any borrowings wll mature two years from the date of borrowing. C. Noncallable 10% bonds with a face amount of $18.2 million were issued for $18.2 million on September 30, 2002. The bonds mature on September 30, 2022. Sufficient cash is expected to be avallable to…

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The balance sheet at December 31, 2024, for Nevada Harvester Corporation includes the liabilities listed below: a. 7% bonds with a face amount of $46 million were issued for $46 million on October 31, 2015. The bonds mature on October 31, 2035. Bondholders have the option of calling (demanding payment on) the bonds on October 31, 2025, at a redemption price of $46 million. Market conditions are such that the call is not expected to be exercised. b. Management intended to refinance $6.6 million of its 14% notes that mature in May 2025. In early March, prior to the actual issuance of the 2024 financial statements, Nevada Harvester negotiated a line of credit with a commercial bank for up to $4.6 million any time during 2025. Any borrowings will mature two years from the date of borrowing. c. Noncallable 6% bonds with a face amount of $14.5 million were issued for $14.5 million on September 30, 2005. The bonds mature on September 30, 2025. Sufficient cash is expected to be available to…

On January 1, 2023, Marigold Corporation purchased a newly issued $1,250,000 bond. The bond matured on December 31, 2025, and paid interest at 6% every June 30 and December 31. The market interest rate was 8%. Marigold's fiscal year-end is October 31, and the company had the intention and ability to hold the bond until its maturity date. The bond will be accounted using the amortized cost model. Click here to view Table A.2-PRESENT VALUE OF 1-(PRESENT VALUE OF A SINGLE SUM) Click here to view Table A.4-PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 (a) Calculate the price paid for the bond using a financial calculator or Excel functions. (Round answers to 2 decimal places, eg. 52.75.) PV S

On January 1, 2023, Marigold Corporation purchased a newly issued $1,250,000 bond. The bond matured on December 31, 2025, and paid interest at 6% every June 30 and December 31. The market interest rate was 8%. Marigold's fiscal year-end is October 31, and the company had the intention and ability to hold the bond until its maturity date. The bond will be accounted using the amortized cost model. Click here to view Table A.2 - PRESENT VALUE OF 1-(PRESENT VALUE OF A SINGLE SUM) Click here to view Table A.4 - PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 (a) Calculate the price paid for the bond using a financial calculator or Excel functions. (Round answers to 2 decimal places, e.g. 52.75.) PV $

On January 1, 2023, Larkspur Corporation purchased a newly issued $1,500,000 bond. The bond matured on December 31, 2025, and paid interest at 6% every June 30 and December 31. The market interest rate was 8%. Larkspur's fiscal year-end is October 31, and the company had the intention and ability to hold the bond until its maturity date. The bond will be accounted using the amortized cost model. Calculate the price paid for the bond using a financial calculator or Excel functions. (Round answers to 2 decimal places, eg. 52.75.) the price paid for the bond is $ 1,421,367.95

In January 2019, Cannon announced the issuance of a $1.2 billion bond. The bonds have a coupon rate of 6.0% payable semiannually. Assume the bonds have been assigned credit ratings of BBB (stable outlook) by Standard and Poor's, Baa2 (stable outlook) by Moody's, and BBB (stable outlook) by Fitch. Which of the following is true? Choose all that are correct. The coupon rate on these bonds would have been higher if Standard and Poor's, Moody's, and Fitch had assigned lower credit ratings. The periodic interest payment will be $36 million. The yield on these bonds would have been lower if Standard and Poor's, Moody's, and Fitch had assigned higher credit ratings. The periodic interest expense will depend on the bond's coupon rate.