Question 19 On January 3, 2020, Ivanhoe Company acquires $520000 of Adam Company’s 10-year, 10% bonds...
Question 19 On January 3, 2020, Ivanhoe Company acquires $520000 of Adam Company’s 10-year, 10% bonds at a price of $552090 to yield 9%. Interest is payable each December 31. The bonds are classified as held-to-maturity. Assuming that Ivanhoe Company uses the effective-interest method, what is the amount of interest revenue that would be recognized in 2021 related to these bonds?
$52000
$55209
$49480
$49688
Homework Answers
| Answer |
| Answer is C) $ 49,480 |
| Explanation |
| interest revenue = Amount*Market rate |
| 552090*9% |
| Interest revenue = $ 49,688 |
| Cash receivable = 52000 |
| Amortization = $ 2,312 |
| 2021 interest revenue = (552090-2312)*9% = $ 49,480 |
| So answer is C) $ 49,480 |
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Question 19 On January 3, 2020, Ivanhoe Company acquires $520000
of Adam Company’s 10-year, 10% bonds...
On January 3, 2020, Ivanhoe Company acquires $520000 of Adam Company’s 10-year, 10% bonds at a...
On January 3, 2020, Ivanhoe Company acquires $520000 of Adam
Company’s 10-year, 10% bonds at a price of $552090 to yield 9%.
Interest is payable each December 31. The bonds are classified as
held-to-maturity.
Assuming that Ivanhoe Company uses the effective-interest
method, what is the amount of interest revenue that would be
recognized in 2021 related to these bonds?
$52000
$55209
$49480
$49688
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On January 3, 2020, Ivanhoe Company acquires $520000 of Adam
Company’s 10-year, 10% bonds at a price of $552090 to yield 9%.
Interest is payable each December 31. The bonds are classified as
held-to-maturity.
Assuming that Ivanhoe Company uses the effective-interest
method, what is the amount of interest revenue that would be
recognized in 2021 related to these bonds?
$52000
$55209
$49480
$49688
On January 1, 2020, Sweet Company acquires $120,000 of Spiderman Products, Inc., 9% bonds at a price of $114,135. Interest is received on January 1 of each year, and the bonds mature on January 1, 2023. The investment will provide Sweet Company a 11% yield. The bonds are classified as held-to-maturity. Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the straight-line method. (Round answers to o decimal places, e.g. 2,500.) Schedule of Interest Revenue and Bond...
On January 1, 2017, Marin Company acquires $140,000 of
Spiderman Products, Inc., 10% bonds at a price of $136,579.
Interest is received on January 1 of each year, and the bonds
mature on January 1, 2020. The investment will provide Marin
Company a 11% yield. The bonds are classified as
held-to-maturity.
Z Your answer is partially correct. Try again. Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the straight-lim Schedule of Interest Revenue and Bond Discount...
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