Question

NEED ASAP 10 MINS PLEASE SHOW CALCULATIONS!!!!!

Crystal Company issued 8% bonds, dated January 1, with a face amount of $600,000 on January 1, 2021. The bonds sold for $551,133 and mature in 2035 (15 years). For bonds of similar risk and maturity the market yield was 9%. Interest is paid semiannually on June 30 and December 31. Assume Crystal determines interest at the effective rate. Fiscal year ends on December 31. Answer the following questions: 1. What is the amount related to the bonds that Crystal will report in its balance sheet at December 31, 2021? 2. What is the amount related to the bonds that Crystal will report in its income statement for the year ended December 31, 2021? (Ignore income taxes.) activities 3. What is the amount related to the bonds that Crystal will report in its statement of cash flows for the year ended December 31, 2021? Indicate the category in which to classify cash flows activities 4. Assume the entire bond issue was purchased by Omega Company. Omega is holding the bonds in its trading portfolio. The fair value of the bonds on December 31, 2021 is $561,233 2. At what amount will Omega report this investment in the December 31, 2021 balance sheet? b. What is the amount related to the bond investment that Omega will report in its income statement for the year ended December 31, 2021? (Ignore income taxes.) c. What is the amount related to the bond investment that Omega will report in its statement of cash flows for the year ended December 31, 2021? Indicate the category in which to classify cash flows activities activities (Do not odd dollar sign; do not add commo by yourself to your amount: round the answer to the whole number use minus sign if the amount is negative)

Answer 1

x5 2020-09(2) SEP.xlsx - Microsoft Excel ? X FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW DEVELOPER Sign in L20 X fi A B с D E N 0 P 1 2 Coupon rate per period (8%/2) 4.00% G H K M Interest payment (Credit Cash) = Face value of bond * Coupon rate Interest Expense (Debit Interest Expense) = Carrying value of bond for previous period * Market or Discounting rate Amortization of bond Discount (Credit Bond Discount) = Interest Expense - Interest payment Debit Balance in Bond Discount = Debit Balance in Bond Discount for previous period - Amortization of bond Discount 3 Face value of bond $ 600,000 4 Market rate per period (9%/2) 4.50% 5 Interest paid (600000*4%) $ 24,000 Credit Balance in Bond Payable = Face value of bond Carrying value of bond = Credit Balance in Bond Payable - Debit Balance in Bond Discount 6 Interest paid on Number of period (15*2) Semi annually 30 7 8 Bond Discount Amortization Table 9 10 Amortiza Debit Credit tion of Balance Balance in Carrying Interest Interest bond in Bond Bond value of Date payment Expense Discount Discount Payable bond Jan 1, 2021 48,867 600,000 551,133 Jun 30, 2021 24,000 24,801 801 48,066 600,000 551,934 Dec 31, 2021 24,000 24,837 837 47,229 600,000 552,771 48,000 49,638 552,771 11 12 Issue price of bonds Less: face value of Bond Discount on Bond payable $ $ $ Period 0 1 2 Total 551,133 600,000 48,867 13 14 15 16 Answer 1 Amount reported on bonds at Balance sheet 2021 17 Answer 2 Interest expense recorded in the income statement 18 Answer 3 Cash received by issuing the bonds (Financing activities - Cash inflows) 19 Cash payment for interest (Operating activities - Cash outflows) 20 Sheet30 Sheet31 Sheet32 Sheet33 Sheet34 Sheet35 READY 552,771 49,638 551,133 (48,000) Actitate Widows Go to Settings to activate Windows Sheet36 Sheet37 Sheet38 + 3 1 + 100% i Search the web and Windows O ENG IN 04:44 16-09-20

XIA 5 2020-09(2) SEP.xlsx - Microsoft Excel ? X FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW DEVELOPER Sign in K24 X A B с D E F G H K M N O P 7 Number of period (15*2) 30 8 Bond Discount Amortization Table 9 Amortiza Debit Credit tion of Balance Balance in Carrying Interest | Interest bond in Bond Bond value of Date payment Expense Discount Discount Payable bond Jan 1, 2021 48,867 600,000 551,133 Jun 30, 2021 24,000 24,801 801 48,066 600,000 551,934 Dec 31, 2021 24,000 24,837 837 47,229 600,000 552,771 48,000 49,638 552,771 14 552,771 49,638 551,133 (48,000) 10 Period 11 Issue price of bonds $ 551,133 0 12 Less: face value of Bond $ 600,000 1 13 Discount on Bond payable $ 48,867 2 Total 15 16 Answer 1 Amount reported on bonds at Balance sheet 2021 17 Answer 2 Interest expense recorded in the income statement 18 Answer 3 Cash received by issuing the bonds (Financing activities - Cash inflows) 19 Cash payment for interest (Operating activities - Cash outflows) 20 Answer 4 Amount of trading investment (reported at fair value) 22 23 Answer 5 Interest revenue received 24 Unrealized gain on trading investments (561233-551133) 25 Amount reported on the income statement 26 27 Answer 6 Cash payment for acquired trading investments (investing activities - Cash outflows) 28 Cash receipts for interest revenue (operating revenue - Cash inflows) 29 21 561,233 48,000 10,100 58,100 (551,133) 48,000 30 31 Activate Widows Go to Settings to activate Windows Sheet30 Sheet31 Sheet32 Sheet33 Sheet34 Sheet35 Sheet36 Sheet37 Sheet38 + 1 READY 3 1 + 100% i Search the web and Windows O ENG IN 04:44 16-09-20