Date | Account titles and explanation | Debit | Credit | |
a) | 31-Dec-19 | Investment in bonds | $103,600 | |
Premium on bond | $8,273 | |||
Cash | $111,873 | |||
(investment recorded at amorized cost) | ||||
b) | 31-Dec-20 | Cash | $10,360 | |
Interest income | $8,950 | |||
Premium on bond | $1,410 | |||
(interest recognised) | ||||
31-Dec-22 | Cash | $10,360 | ||
Interest income | $8,715 | |||
Premium on bond | $1,645 | |||
(interest recognised) | ||||
c) | 31-Dec-19 | Bonds A/c - Trading | $111,873 | |
Cash | $111,873 | |||
(Trading bonds purchased) | ||||
31-Dec-20 | Fair value changes - Trading bonds | $2,253 | ||
To, Bonds A/c - Trading | $2,253 | |||
(fair value adjustments of bonds) | ||||
31-Dec-20 | Income statement A/c | $2,253 | ||
Fair value changes - Trading bonds | $2,253 | |||
(Fair value income transferred to income statement) | ||||
31-Dec-21 | Bonds A/c - Trading | $3,673 | ||
Fair value changes- Trading bonds | $3,673 | |||
(Fair value changes recognised) | ||||
31-Dec-21 | Fair value changes- Trading bonds | $3,673 | ||
Income statement A/c | $3,673 | |||
(Fair value income transferred to income statement) | ||||
31-Dec-22 | Fair value changes - Trading bonds | $4,917 | ||
To, Bonds A/c - Trading | $4,917 | |||
(fair value adjustments of bonds) | ||||
31-Dec-22 | Income statement A/c | $4,917 | ||
Fair value changes - Trading bonds | $4,917 | |||
(Fair value income transferred to income statement) | ||||
31-Dec-23 | Bonds A/c - Trading | $1,962 | ||
Fair value changes- Trading bonds | $1,962 | |||
(Fair value changes recognised) | ||||
31-Dec-23 | Income statement A/c | $1,962 | ||
Fair value changes - Trading bonds | $1,962 | |||
(Fair value income transferred to income statement) | ||||
The following amortization schedule is for Sheffield Ltd.'s investment in Spangler Corp.'s $103,600, five-year bonds with...
Problem 9-3 The following amortization schedule is for Monty Ltd.’s investment in Spangler Corp.’s $107,200, five-year bonds with a 10% interest rate and a 8% yield, which were purchased on December 31, 2019, for $115,760: Cash Received Interest Income Bond Premium Amortized Amortized Cost of Bonds Dec. 31, 2019 $115,760 Dec. 31, 2020 $10,720 $9,261 $1,459 114,301 Dec. 31, 2021 10,720 9,144 1,576 112,725 Dec. 31, 2022 10,720 9,018 1,702 111,023 Dec. 31, 2023 10,720 8,882 1,838 109,185 Dec. 31,...
Problem 9-3 The following amortization schedule is for Ayayai Ltd.'s investment in Spangler Corp.'s $102,500, five-year bonds with a 13% interest rate and a 11% yield, which were purchased on December 31, 2019, for $110,184: Cash Received Interest Income Bond Premium Amortized Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2022 Dec 31, 2023 Dec. 31. 2024 $13,338 13,338 13,338 13,338 13,338 $12,120 11,986 11,838 11,673 11,489 $1,218 1,352 1,500 1,665 1,849 Amortized Cost of Bonds $110,184...
Problem 9-3 The following amortization schedule is for Martinez Ltd.'s investment in Spangler Corp's $75,000, five-year bonds with a 7% interest rate and a 5% yield, which were purchased on December 31, 2016, for $81,494 Bond Premium Amortized Amortized Cost of Bonds Cash Interest Received Income Dec. 31, 2016 $81,494 Dec. 31, 2017$5,250 5,250 5,250 5,250 5,250 Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021 $4,075 4,016 3,954 3,889 3,821 $1,175 1,234 1,296 1,361 1,428 80,319...
Please show all calculations on how you got the amounts for the journal entry. *E10.26 (LO 5, 9) (Measurement after Acquisition-Revaluation Model) On January 1, 2020, Algo Ltd. acquires a building at a cost of $230,000. The building is expected to have a 20-year life and no residual value. The asset is accounted for under the revaluation model, using the asset adjustment method. Revaluations are carried out every three years. On December 31, 2022, the fair value of the building...
Sheffield Corp. issued $528,000 of 11-year bonds at a discount. Prior to maturity, when the carrying value of the bonds was $512,160, the company redeemed the bonds at 98. Prepare the entry to record the redemption of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Click if you would like to Show Work for this question: Open Show Work Larkspur, Inc. issues a $730,000, 10%, 10-year...
Exercise 9-14 On July 1, 2020, Bridgeport Aggregates Ltd. purchased 6% bonds having a maturity value of $65,000 for $67,331. The bonds provide the bondholders with a 5% yield. The bonds mature four years later, on July 1, 2024, with interest receivable June 30 and December 31 of each year. Bridgeport uses the effective interest method to allocate unamortized discount or premium. The bonds are accounted for using the FV-OCI model with recycling. Bridgeport has a calendar year end. The...
investments. part b only E9.5 (LO 3) (FV-NI Investment in Bonds) Refer to the information in E9.3, except assume that Mustafa hopes to make a gain on the bonds as interest rates are expected to fall. Mustafa accounts for the bonds at fair value with changes in value taken to net income, and separately recognizes and reports interest income. The fair value of the bonds at December 31 of each year end is as follows: 2020 2021 2022 $534,200 $515,000...
Problem 14-01 The following amortization and interest schedule reflects the issuance of 10-year bonds by Sheffield Corporation on January 1, 2014, and the subsequent interest payments and charges. The company's year-end is December 31, and financial statements are prepared once yearly. Year 1/1/2014 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Amortization Schedule Amount Cash Interest Unamortized $24,211 $13,266 $14,458 23,019 13,266 14,637 21,648 13,266 14,843 20,071 13,266 15,079 18,258 13,266 15,351 16,173 13,266 15,664 13,775 13,266 16,024...
The following amortization and interest schedule is for the issuance of 10-year bonds by Bramble Corporation on January 1, 2020, and the subsequent interest payments and charges. The company’s year end is December 31 and it prepares its financial statements yearly. Amortization Schedule Amount Carrying Year Cash Interest Unamortized Amount Jan. 1, 2020 $7,005 $106,995 Dec. 31, 2020 $10,260 $10,700 6,565 107,435 2021 10,260 10,744 6,081 107,919 2022 10,260 10,792 5,549 108,451 2023 10,260 10,845 4,964 109,036 2024 10,260 10,904...
On January 1, 2018, Coconut Finance paid $342,109.40 for 12% bonds of X Ltd. with a maturity value of $318,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2018, mature on January 1, 2024, and pay interest each December 31.Riverbed acquired the bond investment as part of its portfolio of trading securities and it accounts for the bonds at FV-NI, following IFRS. At December 31, 2018, Coconut Finance's year end, the bonds had a fair value...