All of the following statements regarding available-for-sale debt securities are true, except for a. premiums and discounts are amortized b. interest revenue may be debited at the time of acquisition c. the securities will be valued using the lower of cost or market method d. realized gain or loss is the difference between the amortized cost of the bonds and the proceeds from their sale

Q: am. 112.

A: In this scenario, the company has a fixed rate debt and enters into an interest rate swap where it…

Q: Which of the following is true regarding accounting for debt investments? A) The classification of…

A: D) All of the above. B) The fair value option must be elected for all such…

Q: Under the incremental method the proceeds from the sale of debt with detachable stock warrants…

A: when the detachable stock warrant are attached to the debt the proceed from sales should be…

Q: Fixed-income securities consist of debt instruments and preferred stock. Bonds are debt secur…

A: The percentage of bonds issued by a certain class of issuers, such as governments or businesses,…

Q: Do we record unrealized gain or loss as a debit or a credit balance when making the fair value…

A: Financial accounting records all the financial transactions occurred during the accounting period.…

Q: On an income distribution schedule, any gain or loss resulting from intercompany bonds is charged to…

A: Bonds are tradable assets issued by business entities as debt instruments. The holders of the bonds…

Q: Which of the following is not alid statement regarding nds payable? * a. Bonds issued by an entity…

A: Solution: "The amortization of a bond premium increases both the recorded interest expense and…

Q: If the acquisition cost of investment in bonds is less than face amount, there is     discount…

A: Bonds are a less risky investment when compared to investments in equity stocks. The bonds are fixed…

Q: 25. In accounting for debt investments that are classified as FV through profit or loss: O a. any…

A: In accounting for debt investments that are classified as FV through profit or loss unrealised gains…

Q: Unrealized holding gains and losses on debt securities classified as available for sale would have…

A: Other Comprehensive Income refers to items of income and expenses that are not recognized as a part…

Q: All investments in debt securities are classified for reporting purposes in one of three categories,…

A: Definition:   Debt securities: The financial instruments which are bought by investors, or…

Q: Bailey Enterprises purchased bonds on the open market at a discount. The company intends to hold the…

A: Amortized cost accounting involves recording the initial cost of the bonds and then adjusting the…

Q: Given that a bond's carrying value is $185,000 and the fair value is $183,000, what is the journal…

A: Bonds are priced by discounting future cash flows. Future cash flows include coupons and par value…

Q: payable is     Historical Maturity value Discounted cash-flow valuation at current effective rates…

A: The bond payable is considered to be liability for the firm and cooperations because they involve…

Q: Premiums or discounts associated with available-for-sale debt securities are a. usually not…

A: Answer b. amortized to interest revenue over the life of the investment Accounting standards…

Q: When a company exercises its call provision on bonds, the company pays the book value of the bonds…

A: Call provision on the bond is the option held by the issuer for redeeming back the bonds if in case…

Q: Perpetual debt instruments a.    Are compound financial instruments b.    Are derivative financial…

A: Perpetual debt instruments seem to be debt funds that do not have an expiration date. The issuer…

Q: Bonds which are collateralized by specific assets in the event the borrowing company defaults on…

A: Bonds are a form of liability for the business. These can be issued for short term or long term.…

Q: . ABC Corp acquired bonds at a discount and plans to sell these bonds  in the near term to take…

A: Bonds are the debt securities issued by company to raise capital for the business. Bonds carries a…

Q: Which of the following is not considered as a cash equivalent? O A three-year treasury notes…

A: Cash equivalents generally includes Liquid Cash, bank accounts and marketable securities, with…

Q: Interest revenue for debt investments at fair value through other comprehensive income is computed…

A: When the debt instruments are bought at off market terms, such instruments are measured at their…

Q: other comprehensive income

A: Other comprehensive income includes gains or losses that are not included in profit and loss…

Q: The price of a debt instrument is quoted as percentage of its a) face or par value. b) fair market…

A: A debt instrument is a financial contract that enables one party, typically the issuer, to borrow…

Q: Describe the Debt Investments Classified as Available-for-Sale Securities.

A: Available for sale securities are generally stated at their fair values. These types of securities…

Q: Selected data from Chering Division's accounting records revealed the following:       Sales $…

A: Return on sales = Operating profit / Sales

Q: 2) Debt securities which are classified as held-to-maturity securities are valued at amortized…

A: Securities with maturities over one year are stated as long-term assets and appear on the balance…

Q: e between the carrying value of the investment and its related cumulative unrealized gain or…

A: Investment is the amount which is spent by the producer for the purchase of those goods which…

Q: unamortized premium

A: Any unamortized premium should be reported on the balance sheet of the issuing corporation as Answer…

Q: Which of the following is not generally correct about recording a sale of a debt security before its…

A: The other options are generally correct - A discount on the debt security is typically amortized to…

Q: Where are debt investments classed as trading securities, available-for-sale securities, and…

A: Secured debt obligations: The borrowed money must be returned and has a specified amount, maturity…

Q: The use of the effective-interest method to amortize a discount associated with the acquisition of…

A: The effective interest method is used when the bonds are to be amortized or issued at a discount.…

Q: Under the incremental method the proceeds from the sale of debt with detachable stock warrants…

A: The incremental method involves the allocation of proceeds from the sale of debt with detachable…

Q: When the conversion of bonds payable to common stock is recorded under the market value method and…

A: Journal entry will be - bonds payable debit…

Q: Investments in debt securities are classified into the following categories according to…

A: Investment in debt securities: Purchase of debt securities of another corporation.

Q: Indicate how unrealized holding gains and losses shouldbe reported for debt investments classified…

A: Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from…

Q: The debt component of convertible bonds issued using IFRS is the a. present value of the future cash…

A: When a company issues a convertible bond under International Financial Reporting Standards (IFRS),…

Q: Investments in debt securities made to generate trading gains are classified as:   Multiple Choice…

A: Investment in securities means to put the money in some securities in order to get returns in…

Q: Held-to-maturity securities:   A. All of these choices. B. include stocks as well as bonds. C. may…

A: There are two types of securities- Held-to-maturity securities: These securities are purchased in…

Q: 9.An entity uses the effective interest method in amortizing bond premium. Which of the following is…

A: The bonds payable are the financial instruments that are issued to raise the money from the market…

Q: 6. What is the accounting for issued convertible bond?. The instrument should be recorded solely as…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…