Kern Company purchased bonds with a face amount of €400,000. Kern purchased the bonds at 397,000 and paid brokerage costs of €6,000. The amount to record as the cost of this debt investment is a. 397,000 b. 391,000 C. 403,000 d. 400,000

Kern Company purchased bonds with a face amount of €400,000. Kern purchased the bonds at 397,000 and paid brokerage costs of €6,000. The amount to record as the cost of this debt investment is a. 397,000 b. 391,000 C. 403,000 d. 400,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: If $945,000 of 10% bonds are issued at 102 3/4, the amount of cash received from the sale is 4 Oa.…

A: The bonds' face value is $100 per bond. Bonds are issued at a premium of $2.75 at a total issue…

Q: Warm Runnings Inc. issued ₱400,000 bonds with a nominal interest rate of 4% when the market rate was…

A: The bonds are issued at discount when market rate is higher than the coupon rate of bonds.

Q: ddie Industries issues $950,000 of 8% bonds at 103. The amount of cash received from the sale is…

A: In the given question, Bonds having face value of $ 950,000 are issued at 103. It implies that…

Q: If $449,000 of 10% bonds are issued at 97, the amount of cash received from the sale is a.…

A: The question is asking us to calculate the amount of cash received from the sale of bonds. The bonds…

Q: If $1,000,000 of 8% bonds are issued at 98 1/2, the amount of cash received from the sale is

A: Cash received from the sale of bonds = Face value of bonds x rate at which bonds are issued

Q: If $906,000 of 8% bonds are issued at 102 3/4, the amount of cash received from the sale is Oa.…

A: If a bond is issued at 102 ¾ it means that the bond has been issued at 102.75% of face value. Amount…

Q: Company WQE Face Value Maturity (Yrs) $ 1,000,000 Bank Loan 15 Bond $ 10 750,000 80,000 Interest…

A: We need to compute market value of debt for the given information.

Q: Company XYZ Bank Loan Face Value Maturity (Yrs) 190,000 $ 7 Bond 350,000 10 Interest Expense Cost of…

A: We need to calculate market value of debt for the given information

Q: G’s investment account relates to its debt investments and its equity investments. For balance sheet…

A: G's Investment as follows: Particulars Bond held as Trading Investment Bond held as Available for…

Q: If $800,000 of 11% bonds are issued at 102 3/4, the amount of cash received from the sale is Oa.…

A: Given, Bonds = $800,000 of 11% Rate = 102 3/4 = 102.75%

Q: Bonds Payable has a balance of $1,200,000 and Premium on Bonds Payable has a balance of $18,750. If…

Q: If $949,000 of 8% bonds are issued at 102 3/4, the amount of cash received from the sale is…

A: Bonds: Which are issued by corporates and governments. Bonds pay fixed rate of interest.

Q: Hh1.

A: Redemption is described as the repayment of any security issued or debt issued, or any bonds issued…

Q: If $1,034,000 of 6% bonds are issued at 102 3/4, the amount of cash received from the s Oa.…

A: Cash received from sale of bond. It assumed that the face value of bond is $100. At face value $100…

Q: 27.On October 1, Dennis Company purchase P200,000 face value 12% bonds for 98 plus accrued interest…

A: 12% Bonds=P2,00,000 Brokerage fees= P700 Acquisition of bonds= ?

Q: Horizons plc had the following bank loans outstanding during the whole of 20X8 which form the…

A: Borrowing is defined as an action by which one individual temporarily borrows money from another…

Q: Bonds Payable has a balance of $880,000 and Premium on Bonds Payable has a balance of $9,680. If the…

A: Amount paid on redemption = Face value of bonds x redemption price /100 = $880,000 x 102/100 =…

Q: If $1,093,000 of 8% bonds are issued at 102 3/4, the amount of cash received from the sale is

A: Given that $1093000 of 8% Bonds issued at 102 3/4

Q: Dunder-Mifflin, Inc. hires an investment banker for the sale of the 600,000 bonds from Problem 4.…

A: In corporate finance, determining the cost of debt is crucial for understanding the financial impact…

Q: If $449,000 of 10% bonds are issued at 97, the amount of cash received from the sale is a.…

A: The question is asking us to calculate the amount of cash received from the sale of bonds. The bonds…

Q: P16-2. Debt Investments, Trading. Freder Software Group acquired $1,550,000 par value, zero coupon,…

A: Honor Code- Since you have posted a question with multiple sub-parts, we will provide the solution…

Q: If $1,140,000 of 12% bonds are issued at 102 3/4, the amount of cash received from the sale is…

Q: CCC Corp. had the following long-term debt at December 31: Collateral trust bonds, having securities…

A: Long term bonds are the bonds which have a maturity of more than one year. The classification…

Q: If $434,000 of 10% bonds are issued at 94, the amount of cash received from the sale is a.$407,960…

A: Formulas: Cash received = Face value * Discount rate

Q: Bryce has $1,500,000 of bonds outstanding. The unamortized premium is $21,600. If the company…

A: Total redemption value = Face value of bonds x redemption price/100 = $1500000 x 101/100 =…

Q: If $467,000 of 7% bonds are issued at 98, the amount of cash received from the sale is a.…

A: The question is asking us to calculate the amount of cash received from the sale of bonds. The bonds…

Q: Connection with the sale of these bonds, Socrates paid the following expenses: Promotion costs…

A: Issuing bonds is one way for companies to raise money. Bonds are issued as forms of tradable debt.…

Q: How much should be recorded as the purchase price of the individual PPE items: 4. Issued bonds with…

A: Assets can be purchased with the issue of bonds and stocks.

Q: Bonds Payable has a balance of $896,000 and Premium on Bonds Payable has a balance of $9,856. If the…

A: Redemption of Bonds: The process of repaying the sale amount of bonds to bondholders at the time of…

Q: Horizons plc had the following bank loans outstanding during the whole of 20X8 which form the…

A: Capitalized interest is defined as the interest amount a borrower has not paid to the lender which…

Q: If $1,178,000 of 10% bonds are issued at 102 3/4, the amount of cash received from the sale is a.…

A: The question is asking us to calculate the amount of cash received from the sale of bonds. The bonds…

Q: Eddie Industries issues $903,000 of 8% bonds at 103. The amount of cash received from the sale is…

A: BOND Bond is a Financial Security which is Generally Issued by the Corporations, Government &…

Q: Eddie Industries issues $834,000 of 8% bonds at 105, The amount of cash received from the sale is a.…

Q: If $1,000,000 of 10% bonds are issued at 98, the amount of cash received from the sale is: Oa.…

A: Bond refers to a promise that the borrower will pay the lender the amount of face value along with…

Q: need in 10 minutes 3. On January 1, 20x1, ABC purchased bonds with face amount of P5,000,000. The…

Q: . On January 1, 2020, HIBISCUS Company purchased 4,000 of ₱1,000 face value, 10% bonds of IXORA…

A: Given Data: Face value of bonds = 4,000 bonds at ₱ 1,000 Par value = ₱ 4,000,000 Carrying value of…

Q: The following information relates to the debt investments of Waterstones. 1. On March 1, the company…

A: Journal entry is the primary entry that records the transactions initially.

Q: PB3. 13.2 Starmount Inc. sold bonds with a $50,000 face value, 12% interest, and 10-year term at…

A: Interest expense on bonds The interest expense is the amount paid by the issuers of the bond to the…

Q: Bonds Payable has a balance of $1,040,000 and Discount on Bonds Payable has a balance of $10,400. If…

A: Bonds :Bonds is a long-term debt issued by the government and companies to raise funds for their…

Q: If $1,012,000 of 12% bonds are issued at 102 1/2, the amount of cash received from the sale is a.…

A: Interest Rate = 12%Face Value = 100Present Value = 102.5

Q: Starks products uses the cost method to account for investments in bonds. They purchased cash…

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…

Q: f $800,000 of 11% bonds are issued at 102 3/4, th

A: Answer : Amount of cash received from the sale bond = value of bond * (Issue price of bond / Face…

Q: If $639,000 of 10% bonds are issued at 95, the amount of cash received from the sale is

A: A bond is an instrument of indebtedness to the holders which can be of municipal bonds and corporate…

Question

Kern Company purchased bonds with a face
amount of €400,000. Kern purchased the
bonds at 397,000 and paid brokerage costs
of €6,000. The amount to record as the cost
of this debt investment is
a. 397,000
b. 391,000
C. 403,000
d. 400,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

If $457,000 of 8% bonds are issued at 94, what is the amount of cash received from the sale? Select the correct answer. A. $420,440 B. $457,000 C. $429,580 D. $493,560
If $1,059,000 of 12% bonds are issued at 102 3/4, the amount of cash received from the sale is a. $1,186,080 b. $1,088,123 c. $1,059,000 d. $794,250
If $1,051,000 of 12% bonds are issued at 102 1/2, The amount of cash received from the sale is:
A long-term investment in bonds with a cost of $80,000 was sold for $75,000 cash. What was the gain or loss on the sale? Group of answer choices $5,000 loss on sale of investment $75,000 gain on sale of investment No gain or loss on sale of investment $5,000 gain on sale of investment
The ZBD Co. had USD 1, 530, 000 balance on investment on January 1, 2015. The bonds are accounted for as a financial asset at fair value through profit or loss. The company has 1,500 bonds with face value of P1,000 that pay interest of 8% every March 1 and September 1 of each year until The investment’s fair value (dirty price) at year-end is USD1,525,000. What is the interest income recognized by ZBD Co for year 2015? Show solution and explanation.
A business sold all of the business bonds on 01.07.2016 with a nominal value of TL 1,000 and an annual interest rate of 45%, 200 of which were purchased for trading purposes on 01.03.2016.(Assume that the market rate and the bond rate are the same.) According to this information, which of the following is correct in the journal entry to be made regarding the sales transaction dated 01.07.2016? a. Private Sector Bonds, Notes and Bills Account 200.000 credit b. Banks Account TL 200,000 debit c. Banks Account 290.000 debit d. Loss on sale of marketable securities 90.000 debit e. Gain on sale of marketable securities 90.000 credit
If $571,000 of 9% bonds are issued at 98, the amount of cash received from the sale is a.$519,610 b.$571,000 c.$559,580 d.$622,390
#7 ABC Company purchased bonds with a face amount of $1200000 between interest payment dates. ABC purchased the bonds at 102, paid brokerage costs of $15800, and paid accrued interest for three months of $25800. The amount to record as the cost of this long-term investment in bonds is $1239800. $1200000. $1224000. $1265600.
If $1,153,000 of 9% bonds are issued at 102 1/2, The amount of cash received from the sale is a.$1,153,000 b.$864,750 c.$1,256,770 d.$1,181,825
7
Eddie Industries issues $926,000 of 8% bonds at 102. The amount of cash received from the sale is a.$926,000 b.$1,000,080 c.$898,220 d.$944,520
Eddie industries issue 861000 of bonds at 102. The amount of cash received from the sale is