INTER. ACCOUNTING - CONNECT+ALEKS ACCESS
10th Edition
ISBN: 9781264770335
Author: SPICELAND
Publisher: MCG
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Oakwood Corporation is delinquent on a $2,400,000, 10% note to Second National Bank that was due January 1, 2019. At that time, Oakwood owed the principal amount plus $34,031.82 of accrued interest. Oakwood enters into a debt restructuring agreement with the bank on January 2, 2019.
Required:
Prepare the journal entries for Oakwood to record the debt restructuring agreement and all subsequent interest payments assuming the following independent alternatives:
1.
The bank extends the repayment date to December 31, 2022, forgives the accrued interest owed, reduces the principal by $200,000, and reduces the interest rate to 8%.
2.
The bank extends the repayment date to December 31, 2022, forgives the accrued interest owed, reduces the principal by $200,000, and reduces the interest rate to 1%.
3.
The bank accepts 160,000 shares of Oakwood’s $5 par value common stock, which is currently selling for $14.50 per share, in full settlement of the debt.
4.
The bank accepts…
On October 1,2021 Steve Company borrowed $500,000 from its parent, Pam Company, at an annual interest rate of 5%, with interest payable semiannually on March 31 and September 30. The note’s principle is due in 5 years. Required; a. What balances appear in the December 31, 2021 trial balances of Pam Company and Steve Company with respect to this intercompany loan? b. What balances should appear on the consolidated financial statements of Pam Company and Steve Company with respect to this intercompany loan? c. Prepare the December 31, 2021 elimination entries needed for this intercompany loan.
On January 1, 2018, an entity purchased bonds with face amount of P5,000,000. The entity paid P4,500,000 plus transaction cost of P168,600. The bonds mature on December 31, 2020 and pay 6% interest annually on December 31 of each year with 8% effective yield. The bonds were quoted at 105 on December 31, 2018 and 110 on December 31, 2019.The business model in managing the financial asset is to collect contractual cash flows that are solely payments of principal and interest and also to sell the bonds in the open market. The entity has not elected the fair value option. On December 31, 2019, the entity changed its business model to collect only contractual cash flows. On December 31, 2020, the bonds are quoted at 115 and the market interest rate is 10%.
find the following:
1. What amount of unrealized gain should be reported as component of OCI in the statement of comprehensive income for 2018?
2. What amount of unrealized gain should be reported as component of OCI in the statement of…
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