ZuoTi.Pro
Question

Ivanhoe Company purchased $1100000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2018, with...

Ivanhoe Company purchased $1100000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2018, with interest payable on July 1 and January 1. The bonds sold for $1150896 at an effective interest rate of 7%. Using the effective interest method, Ivanhoe Company decreased the Available-for-Sale Debt Securities account for the Carlin, Inc. bonds on July 1, 2018 and December 31, 2018 by the amortized premiums of $3248 and $3392, respectively.

At February 1, 2019, Ivanhoe Company sold the Carlin bonds for $1135000. After accruing for interest, the carrying value of the Carlin bonds on February 1, 2019 was $1140500. Assuming Ivanhoe Company has a portfolio of available-for-sale debt investments, what should Ivanhoe Company report as a gain (or loss) on the bonds?

$-10396.
$-15896.
$0.
$-5500.
business   accounting   
1 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Answer:- ($5,500)

Explanation:-

Sale value of bonds $1,135,000
Carrying value of bonds $1,140,500
Loss ($1,135,000 - $1,140,500) ($5,500)
1 0
Add a comment
Know the answer?
Add Answer to:
Ivanhoe Company purchased $1100000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2018, with...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Cullumber Company purchased $2450000 of 8%, 5-year bonds from Ritter, Inc. on January 1, 2018, with...

    Cullumber Company purchased $2450000 of 8%, 5-year bonds from Ritter, Inc. on January 1, 2018, with interest payable on July 1 and January 1. The bonds sold for $2585740 at an effective interest rate of 7%. Using the effective-interest method, Cullumber Company decreased the Available-for-Sale Debt Securities account for the Ritter, Inc. bonds on July 1, 2018 and December 31, 2018 by the amortized premiums of $9520 and $9880, respectively. At April 1, 2019, Cullumber Company sold the Ritter bonds...

  • Sheridan Company purchased $2650000 of 7%, 5-year bonds from Ritter, Inc. on January 1, 2018, with interest payable on J...

    Sheridan Company purchased $2650000 of 7%, 5-year bonds from Ritter, Inc. on January 1, 2018, with interest payable on July 1 and January 1. The bonds sold for $2774740 at an effective interest rate of 6%. Using the effective-interest method, Sheridan Company decreased the Available-for-Sale Debt Securities account for the Ritter, Inc. bonds on July 1, 2018 and December 31, 2018 by the amortized premiums of $9920 and $10280, respectively. At December 31, 2018, the fair value of the Ritter,...

  • Landis Co. purchased $500,000 of 8%, 5-year bonds from Ritter, Inc. on January 1, 2011, with...

    Landis Co. purchased $500,000 of 8%, 5-year bonds from Ritter, Inc. on January 1, 2011, with interest payable on July 1 and January 1. The bonds sold for $520,790 at an effective interest rate 7%. Using the effective interest method, Landis Co. decreased the Available-for-Sale Debt Securities account for the Ritter, Inc. bonds on July 1, 2011 and December 31, 2011 by the amortized premiums of $1770 and $1830 respectively. At December 31, 2011, the fair value of the Ritter,...

  • Kieso, Intermediate Accounting, 16e Intermediate Accounting, 16e (ACC 334-335-444 Assignment Gradebook ORION Downloadable eTextbook CALCULATOR ALL...

    Kieso, Intermediate Accounting, 16e Intermediate Accounting, 16e (ACC 334-335-444 Assignment Gradebook ORION Downloadable eTextbook CALCULATOR ALL SCREEN PRINTER VERSION BACK NEXT Question 10 Blossom Company purchased $1300000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2018, with interest payable on July 1 and January 1. The bonds sold for $1349896 at an effective interest rate of 7%. Using the effective interest method, Blossom Company decreased the Available for Sale Debt Securities account for the Carlin, Inc. bonds on...

  • On January 1, 2020, Addison Company purchased $3,00,000 of 5-year bonds with a stated rate of...

    On January 1, 2020, Addison Company purchased $3,00,000 of 5-year bonds with a stated rate of interest of 8% from Charter, Inc. Interest is payable every July 1 and January 1. The market rate for the bonds was 7% which means the bonds sold for $3,124,740. Addison Company uses the effective-interest method and classified the debt investment as Available for Sale. At December 31, 2020, the fair value of the bonds was $3,180,000. What should Addison report as other comprehensive...

  • On February 1, 2018, Debbie Inc. issued 8% bonds dated February 1, 2018, with a face...

    On February 1, 2018, Debbie Inc. issued 8% bonds dated February 1, 2018, with a face amount of $250,000. The bonds mature in 20 years and sold at an effective interest rate of 10%. Interest is paid semiannually on July 31 and January 31. Debbie’s fiscal year is the calendar year. Wolf uses the effective interest method of amortization. 1. Calculate the issuing price of the bonds 2. Prepare journal entries for 2018 using the effective-interest method 3. Compute the...

  • Colah Company purchased $2.7 million of Jackson, Inc., 5% bonds at par on July 1, 2018,...

    Colah Company purchased $2.7 million of Jackson, Inc., 5% bonds at par on July 1, 2018, with interest paid semi-annually. Colah determined that it should account for the bonds as an available-for-sale investment. At December 31, 2018, the Jackson bonds had a fair value of $3.07 million. Colah sold the Jackson bonds on July 1, 2019 for $2,430,000. The purchase of the Jackson bonds on July 1. Interest revenue for the last half of 2018. Any year-end 2018 adjusting entries....

  • Ivanhoe Company sold $6,100,000, 8%, 15-year bonds on January 1, 2022. The bonds were dated January...

    Ivanhoe Company sold $6,100,000, 8%, 15-year bonds on January 1, 2022. The bonds were dated January 1, 2022, and pay interest on December 31. The bonds were sold at 97. Prepare the journal entry to record the issuance of the bonds on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO At December...

  • On January 1, 2021, Lance Brothers Enterprises purchased $720,000 of 3%, 10-year bonds from Carlin, Inc...

    On January 1, 2021, Lance Brothers Enterprises purchased $720,000 of 3%, 10-year bonds from Carlin, Inc with interest payable on July 1 and January 1. Lance Brothers paid $661,135 resulting in an effective (market) interest rate of 4%. The fair value of the bonds as of 12/31/2021 was $675,000. Assume that Lance Brothers has positive intent and ability to hold these bonds to maturity. Using the effective interest method, what would be reported on Lance Brothers' balance sheet and income...

  • Colah Company purchased $1.6 million of Jackson, Inc., 6% bonds at par on July 1, 2018,...

    Colah Company purchased $1.6 million of Jackson, Inc., 6% bonds at par on July 1, 2018, with interest paid semi-annually. Colah determined that it should account for the bonds as an available for sale investment. At December 31, 2018: the Jackson bonds had a fair value of $1.86 million Colah sold the Jackson bonds on July 1, 2019 for $1.440,000 a. The purchase of the Jackson bonds on July 1 b. Interest revenue for the last half of 2018 C....

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT