QUESTION 5Company has a calendar reporting year. Company purchased a 6-year bond for $100,000 on December 20, Year3. The bond was purchased at face value. OnDecember 31, Year3 the fair value of the bond was $102,000.1. Assume the bond will be sold in early January, Year4.1A. At what amount will the bond be reported on the balance sheet at 12/31/Year3? Type 100,000 or 102,000(you can use commas).18. Will the unrealized gain be included in Year3 net income? Type Yes or No. |2. Assume the bond will be held for a few years and then sold.2A. At what amount will the bond be reported on the balance sheet at 12/31/Year3? Type 100,000 or 102,000(you can use commas).2B. Will the unrealized gain be included in Year3 net income? Type Yes or No.3. Assume the bond will be held until maturity.3A. At what amount will the bond be reported on the balance sheet at 12/31/Year3? Type 100,000 or 102,000(you can use commas).38. Will the unrealized gain be included in Year3 net income? Type Yes or No.

An investment in bond is classified as trading when investor intends to sell it quickly within one…

Company has a calendar reporting year. Company purchased a 6-year bond for $100,000 on December 20, Year3. The bond was purchased at face value. On December 31, Year3 the fair value of the bond was $102,000. Assume the bond will be sold in early January. Year4. 1A. At what amount will the bond be reported on the balance sheet at 12/31/Year3? Type 100,000 or 102,000(you can use commas). 18. Will the unrealized gain be included in Year3 net income? Type Yes or No. 1 2. Assume the bond will be held for a few years and then sold. 2A. At what amount will the bond be reported on the balance sheet at 12/31/Year3? Type 100,000 or 102,000(you can use commas). 2B. Will the unrealized gain be included in Year3 net income? Type Yes or No. 3. Assume the bond will be held until maturity. 3A. At what amount will the bond be reported on the balance sheet at 12/31/Year3? Type 100,000 or 102,000(you can use commas). 38. Will the unrealized gain be included in Year3 net income? Type Yes or No.

Company has a calendar reporting year. Company purchased a 6-year bond for $100,000 on December 20, Year3. The bond was purchased at face value. On December 31, Year3 the fair value of the bond was $102,000. Assume the bond will be sold in early January. Year4. 1A. At what amount will the bond be reported on the balance sheet at 12/31/Year3? Type 100,000 or 102,000(you can use commas). 18. Will the unrealized gain be included in Year3 net income? Type Yes or No. 1 2. Assume the bond will be held for a few years and then sold. 2A. At what amount will the bond be reported on the balance sheet at 12/31/Year3? Type 100,000 or 102,000(you can use commas). 2B. Will the unrealized gain be included in Year3 net income? Type Yes or No. 3. Assume the bond will be held until maturity. 3A. At what amount will the bond be reported on the balance sheet at 12/31/Year3? Type 100,000 or 102,000(you can use commas). 38. Will the unrealized gain be included in Year3 net income? Type Yes or No.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 5P: Bats Corporation issued 800,000 of 12% face value bonds for 851,705.70. The bonds were dated and...

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On October 1 a company sells a 3-year, $2,500,000 bond with an 8% stated interest rate. Interest is paid quarterly and the bond is sold at 89.35. On October 1 the company would collect ________. A. $200,000 B. $558,438 C. $2,233,750 D. $6,701,250
Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued October 1, 2019, are due September 30, 2020, and pay interest semiannually on March 31 and September 30. Assume an effective yield rate of 14%. Required: 1. Prepare a bond interest expense and discount amortization schedule using the straight-line method. 2. Prepare a bond interest expense and discount amortization schedule using the effective interest method. 3. Prepare adjusting entries for the end of the fiscal year December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. If income before interest and income taxes of 30% in 2020 is 500,000, compute net income under each alternative. 5. Assume the company retired the bonds on June 30, 2020, at 98 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight line method of amortization b. effective interest method of amortization 6. Compute the companys times interest earned (pretax operating income divided by interest expense) for 2020 under each alternative.
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Bats Corporation issued 800,000 of 12% face value bonds for 851,705.70. The bonds were dated and issued on April 1, 2019, are due March 31, 2023, and pay interest semiannually on September 30 and March 31. Bats sold the bonds to yield 10%. Required: 1. Prepare a bond interest expense and premium amortization schedule using the straight-line method. 2. Prepare a bond interest expense and premium amortization schedule using the effective interest method. 3. Prepare any adjusting entries for the end of the fiscal year, December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. Assume the company retires the bonds on June 30, 2020, at 103 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight-line method of amortization b. effective interest method of amortization