Homework Answers
| (e) | Debit | Fair value adjustment ($194500 - $193070) | 1430 | |
| Credit | Unrealized holding gain on available for sale securities | 1430 | ||
| (f) | Debit | Unrealized holding loss on available for sale securities | 129 | |
| Credit | Fair value adjustment* | 129 |
*Fair value adjustment
| Fair value adjustment required ($196333 - $195750)(credit) | 583 |
| Existing balance in fair value adjustment account (credit) | 454 |
| Adjustment required ($583 - $454) | 129 |
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HW 17-7-Debt Securities AS CORRECTED Presented below is an amortization schedue related to the Orlando Magic's...
Problem 17-01 Presented below is an amortization schedule related to Buffalo Company's 5-year, $180,000 bond with...
Problem 17-01 Presented below is an amortization schedule related to Buffalo Company's 5-year, $180,000 bond with a 6% interest rate and a 3% yield, purchased on December 31, 2018, for $204,731. Cash Interest Received Revenue Bond Premium Amortization Date 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 $10,800 10,800 10,800 10,800 10,800 $6,142 6,002 5,858 5,710 5,557 $4,658 4,798 4,942 5,090 5,243 Carrying Amount of Bonds $204,731 200,073 195,275 190,333 185,243 180,000 The following schedule presents a comparison of the amortized cost...
Presented below is an amortization schedule related to Culver Company’s 5-year, $150,000 bond with a 7%...
Presented below is an amortization schedule related to Culver Company’s 5-year, $150,000 bond with a 7% interest rate and a 4% yield, purchased on December 31, 2018, for $170,034. Date Cash Received Interest Revenue Bond Premium Amortization Carrying Amount of Bonds 12/31/18 $170,034 12/31/19 $10,500 $6,801 $3,699 166,335 12/31/20 10,500 6,653 3,847 162,488 12/31/21 10,500 6,500 4,000 158,488 12/31/22 10,500 6,340 4,160 154,328 12/31/23 10,500 6,172 4,328 150,000 The following schedule presents a comparison of the amortized cost and fair...
Presented below is an amortization schedule related to Martinez Company's 5-year, $140,000 bond with a 6%...
Presented below is an amortization schedule related to Martinez Company's 5-year, $140,000 bond with a 6% interest rate and a 3% yield, purchased on December 31, 2018, for $159,235. Cash Received Interest Revenue Bond Premium Amortization Carrying Amount of Bonds Date 12/31/18 $159,235 12/31/19 $8,400 $4,777 $3,623 155,612 12/31/20 8,400 4,668 3,732 151,880 12/31/21 8,400 4,556 3,844 148,036 12/31/22 8,400 4,441 3,959 144,077 12/31/23 8,400 4,323 4,077 140,000 The following schedule presents a comparison of the amortized cost and fair...
Presented below is an amortization schedule related to Buffalo Company's 5-year, $150,000 bond with a 6%...
Presented below is an amortization schedule related to Buffalo Company's 5-year, $150,000 bond with a 6% Interest rate and a 4% yleld, purchased on December 31, 2018, for $163,356. Bond Premlum Carrylng Amount Cash Recelved Interest Revenue Date Amortization of Bends $163,356 160,890 158,326 12/31/18 12/31/19 $6,534 $2,466 2,564 2,667 $0,000 12/31/20 9,000 6,416 12/31/21 9,000 6,333 155,659 9,000 6,226 2,774 152,885 12/31/22 12/31/23 9,000 6,115 2,885 150,000 The following schedule presents a compartson of the amortized cost and fair...
Problem 17-1 Presented below is an amortization schedule related to Kingbird Company's 5-year, $110,000 bond with...
Problem 17-1 Presented below is an amortization schedule related to Kingbird Company's 5-year, $110,000 bond with a 8% interest rate and a 5 % yield , purchased on December 31, 2015, for $124,287 Carrying Bond Premium Cash Interest Amount Received of Bonds Date Revenue Amortization 12/31/15 $124,287 12/31/16 $8,800 $6,214 $2,586 121,701 8,800 6,085 2,715 118,986 12/31/17 12/31/18 2,851 8,800 5,949 116,135 12/31/19 8,800 5,807 2,993 113,142 8,800 110,000 12/31/20 5,658 3,142 The following schedule presents a comparison of the...
Presented below is an amortization schedule related to Flounder Company's 5-year, $170,000 bond with a 7%...
Presented below is an amortization schedule related to Flounder Company's 5-year, $170,000 bond with a 7% interest rate and a 4% yield, purchased on December 31, 2015, for $192,705. Cash Interest Received Revenue Bond Premium Amortization Date 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 $11,900 11,900 11,900 11,900 11,900 $7,708 7,541 7,366 7,185 6,995 $4,192 4,359 4,534 4,715 4,905 Carrying Amount of Bonds $192,705 188,513 184,154 179,620 174,905 170,000 The following schedule presents a comparison of the amortized cost and fair...
Presented below is an amortization schedule related to Blue Company’s 5-year, $110,000 bond with a 6%...
Presented below is an amortization schedule related to Blue Company’s 5-year, $110,000 bond with a 6% interest rate and a 4% yield, purchased on December 31, 2015, for $119,794. Date Cash Received Interest Revenue Bond Premium Amortization Carrying Amount of Bonds 12/31/15 $119,794 12/31/16 $6,600 $4,792 $1,808 117,986 12/31/17 6,600 4,719 1,881 116,105 12/31/18 6,600 4,644 1,956 114,149 12/31/19 6,600 4,566 2,034 112,115 12/31/20 6,600 4,485 2,115 110,000 The following schedule presents a comparison of the amortized cost and fair...
Problem 17-1 Presented below is an amortization schedule related to Riverbed Company's 5-year $160,000 bond with...
Problem 17-1 Presented below is an amortization schedule related to Riverbed Company's 5-year $160,000 bond with a 8% interest rate and a 6% yield, purchased on December 31, 2015, for 3173,480 Interest Bond Premium Amortization Carrying Amount Date Received $173.480 171.089 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 $12,800 12.500 12,800 12.800 1 2,500 $10.409 10.265 10,113 9,052 5.751 $2,391 2.535 2.587 2.345 301 168,554 165,867 e of the bonds at year endi The following schedule presents a comparison of the...
Accounting for Debt Securities–Available-for-Sale Hilyn Company had the following transactions and adjustments related to a bond...
Accounting for Debt Securities–Available-for-Sale Hilyn Company had the following transactions and adjustments related to a bond investment: 2016 Jan. Purchased $800,000 face value of Cynad, Inc.'s 9 percent bonds at 99 plus a brokerage commission of $1,400. The bonds pay interest on June 30 and December 31 and mature in 15 years. Hilyn does 1 not expect to sell the bonds in the near future, nor does it intend to hold the bonds to maturity. June 30 Received the semiannual...
On December 31, 2015, ABC Company issued $170,000 par of a 7% interest rate and a...
On December 31, 2015, ABC Company issued $170,000 par of a 7% interest rate and a 4% yield for $192,705, which were purchased by DEF Company. Interest is received yearly on December 31. The effective interest method is used for any premium or discount to be amortized by the investor. Presented below is an amortization schedule prepard by DEF Company related to this debt investment in ABC Company’s bonds. Date Cash Received Interest Revenue Bond Premium Amortization Carrying Amount of...
Problem 17-01 Presented below is an amortization schedule related to Buffalo Company's 5-year, $180,000 bond with a 6% interest rate and a 3% yield, purchased on December 31, 2018, for $204,731. Cash Interest Received Revenue Bond Premium Amortization Date 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 $10,800 10,800 10,800 10,800 10,800 $6,142 6,002 5,858 5,710 5,557 $4,658 4,798 4,942 5,090 5,243 Carrying Amount of Bonds $204,731 200,073 195,275 190,333 185,243 180,000 The following schedule presents a comparison of the amortized cost...
Presented below is an amortization schedule related to Martinez Company's 5-year, $140,000 bond with a 6% interest rate and a 3% yield, purchased on December 31, 2018, for $159,235. Cash Received Interest Revenue Bond Premium Amortization Carrying Amount of Bonds Date 12/31/18 $159,235 12/31/19 $8,400 $4,777 $3,623 155,612 12/31/20 8,400 4,668 3,732 151,880 12/31/21 8,400 4,556 3,844 148,036 12/31/22 8,400 4,441 3,959 144,077 12/31/23 8,400 4,323 4,077 140,000 The following schedule presents a comparison of the amortized cost and fair...
Presented below is an amortization schedule related to Buffalo Company's 5-year, $150,000 bond with a 6% Interest rate and a 4% yleld, purchased on December 31, 2018, for $163,356. Bond Premlum Carrylng Amount Cash Recelved Interest Revenue Date Amortization of Bends $163,356 160,890 158,326 12/31/18 12/31/19 $6,534 $2,466 2,564 2,667 $0,000 12/31/20 9,000 6,416 12/31/21 9,000 6,333 155,659 9,000 6,226 2,774 152,885 12/31/22 12/31/23 9,000 6,115 2,885 150,000 The following schedule presents a compartson of the amortized cost and fair...
Problem 17-1 Presented below is an amortization schedule related to Kingbird Company's 5-year, $110,000 bond with a 8% interest rate and a 5 % yield , purchased on December 31, 2015, for $124,287 Carrying Bond Premium Cash Interest Amount Received of Bonds Date Revenue Amortization 12/31/15 $124,287 12/31/16 $8,800 $6,214 $2,586 121,701 8,800 6,085 2,715 118,986 12/31/17 12/31/18 2,851 8,800 5,949 116,135 12/31/19 8,800 5,807 2,993 113,142 8,800 110,000 12/31/20 5,658 3,142 The following schedule presents a comparison of the...
Presented below is an amortization schedule related to Flounder Company's 5-year, $170,000 bond with a 7% interest rate and a 4% yield, purchased on December 31, 2015, for $192,705. Cash Interest Received Revenue Bond Premium Amortization Date 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 $11,900 11,900 11,900 11,900 11,900 $7,708 7,541 7,366 7,185 6,995 $4,192 4,359 4,534 4,715 4,905 Carrying Amount of Bonds $192,705 188,513 184,154 179,620 174,905 170,000 The following schedule presents a comparison of the amortized cost and fair...
Problem 17-1 Presented below is an amortization schedule related to Riverbed Company's 5-year $160,000 bond with a 8% interest rate and a 6% yield, purchased on December 31, 2015, for 3173,480 Interest Bond Premium Amortization Carrying Amount Date Received $173.480 171.089 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 $12,800 12.500 12,800 12.800 1 2,500 $10.409 10.265 10,113 9,052 5.751 $2,391 2.535 2.587 2.345 301 168,554 165,867 e of the bonds at year endi The following schedule presents a comparison of the...
Accounting for Debt Securities–Available-for-Sale Hilyn Company had the following transactions and adjustments related to a bond investment: 2016 Jan. Purchased $800,000 face value of Cynad, Inc.'s 9 percent bonds at 99 plus a brokerage commission of $1,400. The bonds pay interest on June 30 and December 31 and mature in 15 years. Hilyn does 1 not expect to sell the bonds in the near future, nor does it intend to hold the bonds to maturity. June 30 Received the semiannual...
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