Bonds Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond. To find out: The AI reports a gain or loss, when adjusting the bonds to fair value.

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Answer 1

Question

Chapter 14, Problem 14.15BE

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

To find out: The AI reports a gain or loss, when adjusting the bonds to fair value.

(b)

To determine

To find out: When change in the fair value is attributable to a change in the interest rate, would the interest increase or decrease.

(c)

To determine

To find out: The gain or loss would be reported in the net income or as other comprehensive income.

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Answer 2

Question

Chapter 14, Problem 14.15BE

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

To find out: The AI reports a gain or loss, when adjusting the bonds to fair value.

(b)

To determine

To find out: When change in the fair value is attributable to a change in the interest rate, would the interest increase or decrease.

(c)

To determine

To find out: The gain or loss would be reported in the net income or as other comprehensive income.

Expert Solution & Answer

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Answer 3

Question

Chapter 14, Problem 14.15BE

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

To find out: The AI reports a gain or loss, when adjusting the bonds to fair value.

(b)

To determine

To find out: When change in the fair value is attributable to a change in the interest rate, would the interest increase or decrease.

(c)

To determine

To find out: The gain or loss would be reported in the net income or as other comprehensive income.

Expert Solution & Answer

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Answer 4

Question

Chapter 14, Problem 14.15BE

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

To find out: The AI reports a gain or loss, when adjusting the bonds to fair value.

(b)

To determine

To find out: When change in the fair value is attributable to a change in the interest rate, would the interest increase or decrease.

(c)

To determine

To find out: The gain or loss would be reported in the net income or as other comprehensive income.

Expert Solution & Answer

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Answer 5

Chapter 14, Problem 14.15BE

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

To find out: The AI reports a gain or loss, when adjusting the bonds to fair value.

(b)

To determine

To find out: When change in the fair value is attributable to a change in the interest rate, would the interest increase or decrease.

(c)

To determine

To find out: The gain or loss would be reported in the net income or as other comprehensive income.

Answer 6

Chapter 14, Problem 14.15BE

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

To find out: The AI reports a gain or loss, when adjusting the bonds to fair value.

Answer 7

Chapter 14, Problem 14.15BE

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

To find out: The AI reports a gain or loss, when adjusting the bonds to fair value.

Answer 8

(b)

To determine

To find out: When change in the fair value is attributable to a change in the interest rate, would the interest increase or decrease.

Answer 9

(b)

To determine

To find out: When change in the fair value is attributable to a change in the interest rate, would the interest increase or decrease.

Answer 10

(c)

To determine

To find out: The gain or loss would be reported in the net income or as other comprehensive income.

Answer 11

(c)

To determine

To find out: The gain or loss would be reported in the net income or as other comprehensive income.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 14 - How is periodic interest determined for...Ch. 14 - As a general rule, how should long-term...Ch. 14 - How are bonds and notes the same? How do they...Ch. 14 - What information is contained in a bond indenture?...Ch. 14 - Prob. 14.5Q Ch. 14 - How is the price determined for a bond (or bond...Ch. 14 - A zero-coupon bond pays no interest. Explain.Ch. 14 - Prob. 14.8Q Ch. 14 - Compare the two commonly used methods of...Ch. 14 - Prob. 14.10Q

To find out: When change in the fair value is attributable to a change in the interest rate, would the interest increase or decrease.

To find out: The gain or loss would be reported in the net income or as other comprehensive income.

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Chapter 14 Solutions