ired: - each of th. answers to al Amortizati od Ending
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- During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows: The net holding gain or loss included in Anthonys income statement for the year should be: a. 0 b. 3,000 gain c. 9,000 loss d. 12,000 lossFollowing are the non-strategic Investment transactions of Corona Inc.: 2023 Jan. 1 Purchased for $91,145 an 8.58, 586,000 bond that matures in 20 years from anna Corporation when the market interest rate was 7.98. There was a $50 transaction fee included in the above-noted payment amount. Interest is paid semiannually beginning June 30, 2023. The acquisition vas made with intention to hold to maturity. June 30 Received interest on the bond. July 1 Paid $126,633 for a Trust Inc. bond with a par value of $131,000 and a fifteen-years ters. The bond pays interest quarterly beginning September 30, 2023, at the annual rate of 8.38; the market interest rate on the date of purchase was 8.7%. There was a $50 transaction fee included in the above-soted payment amount. Sept. 30 Received interest on the Trust bond. Dec. 31 Received interest on the lanna and Trust bonds. 31 The fair values of the bonds on this date equalled the fair values. Required: 1. For each of the bond investments, prepare an…Following are the non-strategic investment transactions of Corona Inc.: 2023 Jan. 1 Purchased for $93,059 an 9.5%, $88,000 bond that matures in 22 years from Hanna Corporation when the market interest rate was 8.9%. There was a $50 transaction fee included in the above-noted payment amount. Interest is paid semiannually beginning June 30, 2023. The acquisition was made with intention to hold to maturity. June 30 Received interest on the Hanna bond. July 1 Paid $128,591 for a Trust Inc. bond with a par value of $133,000 and a seventeen-years term. The bond pays interest quarterly beginning September 30, 2023, at the annual rate of 9.3%; the market interest rate on the date of purchase was 9.7%. There was a $50 transaction fee included in the above-noted payment amount. Sept. 30 Received interest on the Trust bond. Dec. 31 Received interest on the Hanna and Trust bonds. 31 The fair values of the bonds on this date equalled the fair values. Required: 1. For each of the bond investments,…
- Monkey Mortgage Inc. engaged in the following non-strategic investment transactions during 2023, all with intent to hold to maturity: 2023 Jan. 1 Purchased for $414, 441 a 9.5%, $408,000 Jaguar Corp. bond that matures in five years when the market interest rate was 9.1%. There was a $$60 transaction fee included in the above - noted payment amount. Interest is paid semiannually beginning June 30, 2023. Monkey Mortgage Inc. plans to hold this investment until maturity. Mar. 1 Bought 6, 700 shares of Mule Corp., paying $33.20 per share. There was a $60 transaction fee included in the above-noted payment amount. May 7 Received dividends of $1.60 per share on the Mule Corp. shares. June 1 Paid $323,000 for 21,350 shares of Zebra common shares. There was a $$60 transaction fee included in the above-noted payment. June 30 Received interest on the Jaguar bond. Aug. 1 Sold the Mule Corp. shares for $33.45 per share. Dec. 31 Received interest on the Jaguar bond. Dec. 31 The fair value of the…On January 1, 2023 AAA Company acquired BBB Company 10%, P600,000 bonds for P621,300. The bonds which pays interest on every June 30 and December 31. The bond will mature on January 1, 2028 and were purchased to yield 9%. The business model of the AAA Company in managing investment is to hold the asset in order to collect the contractual cash flows. 1. how much is the interest income in 2023 2.how much is the carrying amount of the bonds at december 31,2023 3.how much is the unamortized portion of premium on december 31, 2024 4. how much cash to be debited on december 31,2024Following are the non-strategic investment transactions of Corona Inc.: 2020 Jan. June July Sept. Dec. 1 Purchased for $92,110 an 9.0%, $87,000 bond that matures in 21 years from Hanna Corporation when the market interest rate was 8.4%. Interest is paid semiannually beginning June 30, 2020. Received interest on the Hanna bond. 30 1 30 31 31 Paid $127,600 for a Trust Inc. bond with a par value of $132,000 and a sixteen- years term. The bond pays interest quarterly beginning September 30, 2020, at the annual rate of 8.8%; the market interest rate on the date of purchase was 9.2%. Received interest on the Trust bond. Received interest on the Hanna and Trust bonds. The fair values of the bonds on this date equalled the fair values. Required: 1. For each of the bond investments, prepare an amortization schedule showing only 2020 and 2021. (Round your intermediate and final answers to the nearest whole dollar amount. Enter all the amounts as positive values.) 2. Prepare the entries to record…
- On January 1, 2021, PHILIPPINE COMPANY acquired 5-year, 15%, $8,000,000 H-bonds. The investments were acquired at aprice to yield 14%. Interest is payable annually on December 31 starting December 31, 2021. PHILIPPINES' business model isto hold the financial assets to collect contractual cash flows. QUESTION:a. Determine the initial measurement of H-bonds on January 1, 2021.b. Prepare a schedule of amortization using the effective interest method. Use the following columns:DateInterestCollectionInterestIncomeAmortizationPresent Valuec. Prepare all journal entries for 2021 and 2022 applicable to this transaction.On January 1, 2022, BTS Company purchased 3,000, P1,000 face value term bons with a stated rate of 10% as at amortized cost. The bonds pay interest annually on December 31 and will be redeemed entirely by the issuer on December 31, 2025. The bond investment was purchased for P2,819,100 at an effective rate of 12%.On December 31, 2023, the entity changes business model for managing its financial assets and this investment as reclassified as debt investments at fair value through profit or loss. On this date, the bonds are quoted at 101. What is the carrying value of the debt investment on December 31, 2023 prior to reclassification?On 1/1/23, Jeckle Technologies Inc. paid $4, 792, 085 to acquire $5,000,000 in bonds that mature in 5 years. The bonds pay interest semi - annually at 6% per annum on 6/30 and 12/31. The fair value of the bonds at 12/31/23 was $4, 930, 392. Required: • Prepare the 2023 journal entries if the investment is classified as (i) HTM or (ii) AFS. • Assume Jeckle sold the bond investment on 7/1/24 for $4,890,000. Prepare the required journal entries assuming the bond is classified as (i) HTM or (ii) AFS.
- On January 1, 2020, Ye Company purchased 8% bonds in the face amount of P4,000,000. The bonds mature on January 1, 2025, and were purchased for P4,335,000 to yield 6%. Interest is payable every December 31. The business model for this investment is to collect contractual cash flows composed of principal and interest and to sell the asset in the open market. Fair value on December31, 2020, was P3,870,000 at 9% effective rate. Fair value on December 31, 2021,was P3,615,000 at 12% effective rate. On December 31, 2020, the entity changed the business model for this investment to realize fair value changes. On January 1, 2021, the fair value of the bonds did not change. What total amount is included in profit or loss in 2021 as a result of the reclassification from FVOCI to FVPL? A.P450,100 gainB.P660,100 gainC.P660,100 lossD.P450,100 lossOn January 1, 2026, ABC acquired the entire P4M issue of 12% serial bonds to be held as financial assets at amortized cost. Bonds of P1M mature at annual interval beginning December 31, 2026. Interest is payable annually on December 31. The bonds have 14% effective rate. There is no established purchase price of the bonds. Compute the 1. Initial amount of the investment 2. Carrying value of the investment at the end of 2026. 3. Interest income for the year 2027. 4. Carrying value of the investment at the end of 2027.On January 1, 2021, Illuminati Company purchased 10% bonds with a face amount of P3,000,000. The bonds mature on January 1, 2031, and were purchased for P3,405,000 to yield 8%. The entity used the effective interest method of amortization and interest is payable annually every December 31. The business model for this investment is to collect contractual cash flows composed of interest and principal. On December 31, 2022, the entity changed the business model for this investment to realize fair value changes. On January 1, 2023, the fair value of the bonds was P2,845,000 at an effective rate of 11%. How much is the gain or loss on reclassification? 502,592 gain O 502,592 loss 532,400 gain O 532,400 loss