1. & 2. | Date | Account titles and explanation | Debit | Credit | ||||
July 1. | Investment in bonds | 300 | ||||||
Discount on bond investment | (Plug) | 50 | ||||||
Cash | 250 | |||||||
(Acquired long-term investment) | ||||||||
Dec 31. | Cash | (300*6%*1/2) | 9 | |||||
Discount on bond investment | (Plug) | 1 | ||||||
Interest revenue | (250*8%*1/2) | 10 | ||||||
(Interest earned for the half year) | ||||||||
3 | Date | Account titles and explanation | Debit | Credit | ||||
Dec 31. | Fair value adjustment | (Note:1) | 9 | |||||
Unrealized holding gain | 9 | |||||||
(Increase in value recorded) | ||||||||
Note:1 | ||||||||
$ | $ | |||||||
Fair market value | 260 | |||||||
Less: Carrying value of investment | ||||||||
Book value | 300 | |||||||
Less: Discount | (50-1) | 49 | 251 | |||||
Increase in value | 9 | |||||||
4 | Date | Account titles and explanation | Debit | Credit | ||||
Jan 2. | Unrealized holding loss-NI | (Note:2) | 20 | |||||
Fair value adjustment | 20 | |||||||
(Decrease in value recorded) | ||||||||
Jan 2. | Cash | 240 | ||||||
Fair value adjustment | (Plug) | 11 | ||||||
Discount on bond investment | 49 | |||||||
Investment in bonds | 300 | |||||||
(Investment sold) | ||||||||
Note:2 | ||||||||
$ | ||||||||
Sales value | 240 | |||||||
Less: Carrying value of investment | 251 | |||||||
Decrease in value | -11 | |||||||
Current balance in fair value adjustment=$ 9 (Increase) | ||||||||
This has to make as $ 11 decrease | ||||||||
Hence,loss to be recognized=11+9=$ 20 |
Tanner-UNF Corporation acquired as a long-term investment $300 million of 6% bonds , dated July 1,...
Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management has classified the bonds as available-for-sale investments. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $210...
Tanner-UNF Corporation acquired as a long-term investment $300 million of 7% bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $280 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management has classified the bonds as available for sale investments. As a result of changing market conditions, the fair value of the bonds at December 31, 2018,...
Tanner-UNF Corporation acquired as a long-term investment $260 million of 6% bonds, dated July 1, on July 1, 2018. The market Interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $220 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management has classified the bonds as available for sale investments. As a result of changing market conditions, the fair value of the bonds at December 31, 2018,...
Tanner-UNF Corporation acquired as a long-term investment $250 million of 8% bonds, dated July 1, on July 1, 2021. Company management has classified the bonds as an available for sale investment. The market interest rate field) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $210 million for the bonds. The company will recelve Interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31,...
Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2021. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was...
Tanner-UNF Corporation acquired as a long-term investment $220 million of 6% bonds, dated July 1, on July 1, 2021. Company management has classified the bonds as an available-for-sale investment. The market interest rate yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $190 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was...
Tanner-UNF Corporation acquired as a long-term investment $280 million of 6% bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 8% for bonds of similar risk and maturity. Tanner-UNF paid $240 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management has classified the bonds as available-for-sale investments. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $250...
Tanner-UNF Corporation acquired as a long-term investment $235 million of 8% bonds, dated July 1, on July 1, 2021. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $200 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was...
Tanner-UNF Corporation acquired as a long-term investment $230 million of 8% bonds, dated July 1, on July 1, 2021. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $210 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was...
Tanner-UNF Corporation acquired as a long-term investment $225 million of 8% bonds, dated July 1, on July 1, 2018. The market interest rate (yield) was 10% for bonds of similar risk and maturity. Tanner-UNF paid $180 million for the bonds. The company will receive interest semiannually on June 30 and December 31. Company management has classified the bonds as available-for-sale investments. As a result of changing market conditions, the fair value of the bonds at December 31, 2018, was $190...