On January 1, 2019, Alpha Inc purchased $500,000, 9% bonds issued by Beta Corp. The bonds have a maturity date of December 31, 2024. The market interest rate on January 1, 2019 was 10%. If Alpha Inc accounts for this investment under the FVOCI model, what is the amount at which the Investment in Beta Corp. Bonds will be reported on the statement of financial position at December 31, 2021, given that the current market interest rate is 9.5%? $490,401 $481,046 $487,566 $493,728
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- Refer to the information in RE13-5. Assume that on December 31, 2019, the investment in Smith Corporation bonds has a market value of 12,500. Prepare the year-end journal entry to record the unrealized gain or loss.Frost Company has accumulated the following information relevant to its 2019 earningsper share. 1. Net income for 2019: 150,500. 2. Bonds payable: On January 1, 2019, the company had issued 10%, 200,000 bonds at 110. The premium is being amortized in the amount of 1,000 per year. Each 1,000 bond is currently convertible into 22 shares of common stock. To date, no bonds have been converted. 3. Bonds payable: On December 31, 2017, the company had issued 540,000 of 5.8% bonds at par. Each 1,000 bond is currently convertible into 11.6 shares of common stock. To date, no bonds have been converted. 4. Preferred stock: On July 3, 2018, the company had issued 3,800 shares of 7.5%, 100 par, preferred stock at 108 per share. Each share of preferred stock is currently convertible into 2.45 shares of common stock. To date, no preferred stock has been converted and no additional shares of preferred stock have been issued. The current dividends have been paid. 5. Common stock: At the beginning of 2019, 25,000 shares were outstanding. On August 3, 7,000 additional shares were issued. During September, a 20% stock dividend was declared and issued. On November 30, 2,000 shares were reacquired as treasury stock. 6. Compensatory share options: Options to acquire common stock at a price of 33 per share were outstanding during all of 2019. Currently, 4,000 shares may be acquired. To date, no options have been exercised. The unrecognized compens Frost Company has accumulated the following information relevant to its 2019 earnings ns is 5 per share. 7. Miscellaneous: Stock market prices on common stock averaged 41 per share during 2019, and the 2019 ending stock market price was 40 per share. The corporate income tax rate is 30%. Required: 1. Compute the basic earnings per share. Show supporting calculations. 2. Compute the diluted earnings per share. Show supporting calculations. 3. Indicate which earnings per share figure(s) Frost would report on its 2019 income statement.On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
- On December 31, 2020, Alberta Inc. purchased $500,000, 10% bonds issued by Banff Ltd. The bonds have a maturity date of December 31, 2026. The market interest rate on December 31, 2020 was 9.5%. If Alberta Inc. accounts for this investment under the amortized cost model, what is the amount at which the Investment in Banff Ltd. Bonds will be reported on the statement of financial position at December 31, 2021, given that the current market interest rate is 9%? $519,448 $509,599 $511,050 $490,523On January 1, 2019, CupCompany purchased NoodlesCorporation, 9% bonds with a face value of P4,000,000 for P3,756,000. The debt investments are carried at amortized cost. The effective interest rate at that time is 10%. The bondsare dated January 1, 2019and mature on December 31, 2028. The bonds pay interest annually on December 31. Market quotation for the debt securities at December 31, 2019is 99. Assuming that the debt investment is designated as at fair value through other comprehensive income. How much is the unrealized gain (loss) reported in other comprehensive income for the year 2019?On January 1, 2026, ABC purchased term bonds (to be held by collecting contractual cash flows representing principal and interest) with face amount of P10M and stated interest at 12%. The stated interest is payable annually on December 31. The bonds are acquired to have an effective yield at 14%. The bonds mature on December 31 2030. Determine the amount of the investment to be shown in the financial position statement on December 31, 2027 when the market value at the reporting period is P9,150,000. Use 4-decimal PVF and round off your final answer to nearest peso.
- Auerbach Inc. issued 4% bonds on October 1, 2021. The bonds have a maturity date of September 30, 2031 and a face value of $425 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2022. The effective interest rate established by the market was 6%.Assuming that Auerbach issued the bonds for $361,772,495, what interest expense would it recognize in its 2021 income statement?On July 1, 2019, YYY Company paid P1,198,000 of 10% 20-year bonds with a face amount of P1,000,000. Interest is paid on June 30 and December 31. The bonds were purchased to yield 8%. The effective interest method is used to recognize interest income from this long-term investment. What is the carrying amount of the investment in bonds on December 31, 2019?On February 18, 2021, Union Corporation purchased 1,311 IBM bonds as a long-term investment at their face value for a total of $1,311,000. Union will hold the bonds indefinitely, and may sell them if their price increases sufficiently. On December 31, 2021, and December 31, 2022, the market value of the bonds was $1,273,000 and $1,330,000, respectively. Required: 2. & 3. Prepare the adjusting entry for December 31, 2021 and 2022. (If no entry is required for a
- Metlock Corporation has the following trading portfolio of debt investments as of December 31, 2020. Security Cost A $16,340 B 18,920 C (a) 29,240 $64,500 (b) Fair Value $12,900 On January 22, 2021, Metlock Corporation sold security C for $27,520. List of Accounts 23,220 Prepare the adjusting entry for Metlock Corporation on December 31, 2020, to report the portfolio at fair value. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry.) Save for Later 24,940 $61,060 eTextbook and Media Date Account Titles and Explanation Dec. 31 METLOCK CORPORATION Balance Sheet (Partial) METLOCK CORPORATION Income Statement (Partial) Debit Indicate the balance sheet and income statement presentation of the fair value data for Metlock Corporation at December 31, 2020. $ Credit Attempts: unlimited Submit AnswerOn January 1,2019, DEF Company purchased 456B Corporation, 9% bonds with a face value of P 4,000,000 for P 3,756,000. The effective interest rate at that time is 10%. The bonds are dated January 1,2019 and mature on December 31,2028. The bonds pay interest annually on December 31. Market quotation for the debt investment at December 31,2019 is 99. Assuming that the debt investment is designated as at fair value through other comprehensive income. How much is the unrealized gain (loss) reported in other comprehensive income for the year 2019?On January 1,2019, DEF Company purchased 456B Corporation, 9% bonds with a face value of P 4,000,000 for P 3,756,000. The effective interest rate at that time is 10%. The bonds are dated January 1,2019 and mature on December 31,2028. The bonds pay interest annually on December 31. Market quotation for the debt investment at December 31,2019 is 99. Assuming that the debt investment is designated as at fair value through other comprehensive income. How much is the unrealized gain (loss) reported in other comprehensive income for the year 2019? P 40,000 P 188,400 P 204,000 P 171,240
