League Up & Co. owns vast amounts of corporate bonds. Suppose League Up buys$1,400,000 of RoastCo bonds at face value on January 2, 2018. The RoastCo bonds payinterest at the annual rate of 4% on June 30 and December 31 and mature on December31, 2037. League Up intends to hold the investment until maturity.Requirements1. Journalize any required 2018 entries for the bond investment.2. How much cash interest will League Up receive each year from RoastCo?3. How much interest revenue will League Up report during 2018 on this bondinvestment?.....Requirement 1. Journalize any required 2018 entries for the bond investment. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)Begin by journalizing League Up's investment on January 2, 2018.DateAccounts and ExplanationDebitCredit2018Course ChatO Time1 GB V 19:11DELL

Solution 1: Journal Entries - League Up & Co Date Particulars Debit Credit 2-Jan-18…

Answered: League Up & Co. owns vast amounts of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Your answer is partially correct. Swifty Ltd. issued a $1,184,000, 10-year bond dated January 1, 2023. The bond was sold to yield 12% effective interest. The bond paid 10% interest on January 1 and July 1 each year. The company's year-end was December 31, and Swifty followed IFRS. Using 1. factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the amount received for the bond, and any discount or premium on the bond.
Lord Corporation acquired bonds with a face value of P3,000,000 for P2,800,000 on January 1, 2020. The bond has a stated interest of 10%, pays interest every December 31, and matures on December 31, 2022. Requirements:1. Prepare the necessary journal entries to record the above transactions.2. How much is the investment in bonds on December 31, 2020?3. Assuming that the bond is a serial bond and the P1,000,000 matures every December 31. Prepare the journal entries to record the transactions.4. The same information in No. 3, how much is the investment in bonds on December 31, 2020?
North Co. Issued bonds on July 1, 2018 worth $100,000 with a coupon rate of 10% and an effective interest rate of 8%. Interest is paid annually, every July 1, and bonds mature after 5 years. Required: PV of Bonds: Calculation PV of Principal and PV of Interest and give your explanation about your calculation! Make issuance journal and please explain about the journal! Amortization: Calculation Bond Amortization Table and explain the result! Make Interest adjustment, amortization journal, and explain about the journal! Make Interest payment journal, amortization, and explain about the journal! Journalize Redemption at maturity and explain about the journal!
(see attached image, kindly answer it based on your knowledge, thank you!) Determine the purchase price of the following debt securities that Ace Company intends to purchase: a. 10%, P5,000,000 face value, five-year bonds dated June 30, 2020, for purchase on July 1, 2020, interest payment dates are June 30 and December 31. b. 6% P10,000,000 face value, ten-year bonds, dated June 30, 2018, for purchase on July 1, 2020, interest payment date is June 30. The market rate of interest on July 1, 2020 is 8%.
On January 1, 2024, the Proctor's Restaurant decides to invest in Lake Myrth bonds. The bonds mature on December 31, 2031, and pay interest on June 30 and December 31 at 6% annually. The market rate of interest was 6% on January 1, 2024, so the $50,000 maturity value bonds sold for face value. Proctor's intends to hold the bonds until December 31,2031. Requirements 1. Journalize the transactions related to Proctor's investment in Lake Myrth bonds during 2024. 2. In what category would Proctor's report the investment on the December 31, 2024, balance sheet?
E15-9 Accounting for debt investments Advance & Co. owns vast amounts of corporate bonds. Suppose Advance buys $1,100,000 of FermaCo bonds at face value on January 2, 2018. The FermaCo bonds pay interest at the annual rate of 3% on June 30 and December 31 and mature on December 31, 2037. Advance intends to hold the investment until maturity. Requirements 1. Journalize any required 2018 entries for the bond investment. 2. How much cash interest will Advance receive each year from FermaCo? 3. How much interest revenue will Advance report during 2018 on this bond investment?
A P1,000, 6% bond pays dividend semiannually and will be redeemed at 110% on June 21, 2022. It is bought on June 21, 2021 to yield 4% interest. Find the price of the bond. With Cash flow diagram
← The Airfoil Aircraft Company has issued 5% convertible bonds that mature October 1, 2029. Suppose the bonds are issued October 1, 2021, and pay interest each April 1 and October 1. (Click the icon to view the bond data.) Read the requirements. Requirement 1. Assume the bonds are issued at a price of 93.4. Using the straight-line method of amortization for bond discount: a. Calculate interest expense on bonds payable for each semiannual interest payment period. Use two decimal places. (Round intermediary and final calculations to the nearest cent.) The total interest expense each interest period if the bonds are issued at 93.4 is
A company holds a $100,000 face value corporate bond, bought January 1, 2023, paying 3% annually on December 31, and maturing December 31, 2025. The company paid $102,884 for the bond, to yield 2%. The company categorizes the bond as a held-to-maturity investment, and its accounting year ends December 31. What amount will the company report as interest revenue on the bond for 2024? Round answers to the nearest dollar.
On 1 January 2020, Halo Limited purchased a 10% $900,000 bond as its debt investment. 1. Halo purchased the bond at $866,737. 2. The bond provides bondholders with a 11% yield per annum. 3. The bond matures on 31 December 2024, with interest receivable on 31 December each year. 4. Halo's business model for the bond is held-for collection. Required (Answers round to the nearest dollar): Prepare journal entries for Halo 2020 and 2021.
On January 1, 2020, Roosevelt Company purchased 12% bonds, having a maturity value of $500,000, for $537,907.40. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received January 1 of each year. Roosevelt's business model is to hold these bonds to collect contractual cash flows. Instructions a. Prepare the journal entry at the date of the bond purchase. b. Prepare a bond amortization schedule. c. Prepare the journal entry to record the interest revenue and the amortization for 2020. d. Prepare the journal entry to record the interest revenue and the amortization for 2021.
Small Ltd acquired a portfolio of corporate bonds on 1 July 2019. The bonds will generate contractual cash flows that are solely principal and interest. Small Ltd intends to collect contractual cash flows and also sell the bonds within the next few years. The face value of these bonds: $8,000,000 Coupon paid in arrears annually at the rate of: 7% The bonds will mature in (years): 10 The effective interest rate of the bonds: 9% On 30 June 2020, the fair value of the corporate bonds was $8,000,000 Which of the following is/are true on 30 June 2020 (rounded to the nearest thousand dollars)? Select one or more: O a. The bonds are classified as fair value to OCI O b. A gain needs to be recognised in other comprehensive income for $959,000 O c. The effective interest rate becomes 7%, same as the coupon rate O d. A gain needs to be recognised in profit and loss for $959,000 O e. The fair value of the bonds based on amortised cost at 9% initial rate was $7,041,000 O f. A gain needs to be…

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