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 bondholders with a 10% yield...
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 of $339,900.00.
In 2019, the economic outlook related to X Ltd.’s primary had a major downturn, so that X Ltd.'s debt was downgraded. By the end of 2019, the bonds were priced at 85.5, and at December 31, 2020, they were selling in the market at 87. Conditions reversed in 2021 and the outlook for X Ltd. significantly improved, leaving its bonds with a fair value of 99.5 at December 31, 2021.
Finish the bond amortization table for the four-year period ending December 31, 2021 and show your work.
| date | cash received | interest income | preminum amortization | bond carrying amount |
| Jan 1, 2018 | n/a | n/a | n/a | ? |
| Dec 31, 2018 | 38160 | ? | ? | ? |
| Dec 31, 2019 | 38160 | ? | ? | ? |
| Dec 31, 2020 | 38160 | ? | ? | ? |
| Dec 31, 2021 | 38160 | ? | ? | ? |
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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 bondholders with a 10% yield...
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Exercise 9-20
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Exercise 9-20
On January 1, 2018, Bramble Ltd. paid $387,293.66 for 12% bonds
of Variation Ltd. with a maturity value of $360,000. 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.
Bramble 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, Bramble’s year end, the bonds...
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Exercise 9-14
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having a maturity value of $85,000 for $88,048. The bonds provide
the bondholders with a 5% yield. The bonds mature four years later,
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of each year. Flounder uses the effective interest method to
allocate unamortized discount or premium. The bonds are accounted
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straight-line bond amortization method and adjusts for any rounding
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