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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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12. 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
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- If the carrying amount of bonds redeemed is more than the redemption price, the difference is recorded as a a. discount. b. premium. c. gain. loss. O d.arrow_forwardUnder the incremental method the proceeds from the sale of debt with detachable stock warrants should be allocated to the bonds based on: face value of the bonds if known. the proportionate share of the fair market value of the bonds to the total fair market value of the bonds and stock warrants. face value of the bonds and market value of the warrants. the fair market value of the bonds if known.arrow_forward20.Investments in debt securities are classified into the following categories according to management's intention: Select one: a."To hold until maturity", "available for sale" and "to trade". b. "To retain until maturity" and "to negotiate" c. All are classified as "to hold until maturity". d. "To retain until maturity" and "Available for sale".arrow_forward
- Among the following five types of investments: Held-to-maturity, debt investment Trading, debt investment Available-for-sale, debt investment Trading, equity investment Available-for-sale, equity investment unrealized holding gains or losses are recognized in income for securities classified as (Enter 1, 2, 3, or 4 that represents the correct answer): c, e a, b, c b, d b, c, d, earrow_forwardThe debt component of convertible bonds issued using IFRS is the a. present value of the future cash flows at the market interest rate b. present value of the future cash flows at the stated interest rate c. market value of similar bonds without a conversion feature d. same as the calculation for GAAParrow_forward22. Investments in debt securities made to generate trading gains are classified as: Multiple Choice trading securities. available-for-sale securities. minority securities. held to maturity securities.arrow_forward
- When a company uses the the effective-interest method to amortize a bond discount amortization, the interest expense is equal to a) the market rate multiplied by the beginning-of-period carrying amount of the bonds. b) the market rate of interest multiplied by the face value of the bonds. c) the stated rate multiplied by the beginning-of-period carrying amount of the bonds. d) the stated (nominal) rate of interest multiplied by the face value of the bonds.arrow_forwardIf the sale of bonds falls between interest dates, interest accrued since the last interest payment would be O a. added to; debited to Interest Revenue O b. subtracted from; debited to Interest Revenue O c. subtracted from; credited to Interest Revenue O d. added to; credited to Interest Revenue the sale proceeds andarrow_forward46. Help me selecting the right answer. Thank youarrow_forward
- Held-to-maturity securities: A. All of these choices. B. include stocks as well as bonds. C. may be reported as current or noncurrent assets. D. are reported at fair market value.arrow_forward3. Which of the following categories of investments are reported at their fair values on the balance sheet and have unrealized holding gains and losses included as a separate component of stockholders' equity? a. held-to-maturity debt securitiesb. marketable securitiesc. available-for-sale securitiesd. trading securitiesarrow_forwardWhat is Correct optionarrow_forward
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