Homework Help is Here – Start Your Trial Now!
Business
Accounting
On January 1, 2021, Ayayai Ltd. paid $238,831.09 for 12% bonds of Variation Ltd. with a maturity value of $222,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2021, mature on January 1, 2026, and pay interest each December 31. Ayayai acquired the bond investment as part of its portfolio of trading securities and it accounts for the bonds at FV-NI, following IFRS. At December 31, 2021, Ayayai's year end, the bonds had a fair value of $237,300.00. During 2022, the economic outlook related to Variation's primary business took a major downturn, so that Variation's debt was downgraded. By the end of 2022, the bonds were priced at 85.5, and at December 31, 2023, they were selling in the market at 87. Conditions reversed in 2024 and the outlook for Variation significantly improved, leaving its bonds with a fair value of 99.5 at December 31, 2024.

On January 1, 2021, Ayayai Ltd. paid $238,831.09 for 12% bonds of Variation Ltd. with a maturity value of $222,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2021, mature on January 1, 2026, and pay interest each December 31. Ayayai acquired the bond investment as part of its portfolio of trading securities and it accounts for the bonds at FV-NI, following IFRS. At December 31, 2021, Ayayai's year end, the bonds had a fair value of $237,300.00. During 2022, the economic outlook related to Variation's primary business took a major downturn, so that Variation's debt was downgraded. By the end of 2022, the bonds were priced at 85.5, and at December 31, 2023, they were selling in the market at 87. Conditions reversed in 2024 and the outlook for Variation significantly improved, leaving its bonds with a fair value of 99.5 at December 31, 2024.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Subject: acounting 

On January 1, 2021, Ayayai Ltd. paid $238,831.09 for 12% bonds of Variation Ltd. with a maturity value of $222,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2021, mature on January 1, 2026, and pay interest each December 31. Ayayai acquired the bond investment as part of its portfolio of trading securities and it accounts for the bonds at FV-NI, following IFRS. At December 31, 2021, Ayayai's year end, the bonds had a fair value of $237,300.00. During 2022, the economic outlook related to Variation's primary business took a major downturn, so that Variation's debt was downgraded. By the end of 2022, the bonds were priced at 85.5, and at December 31, 2023, they were selling in the market at 87. Conditions reversed in 2024 and the outlook for Variation significantly improved, leaving its bonds with a fair value of 99.5 at December 31, 2024. (a) Prepare a bond amortization table for the four-year period ended December 31, 2024. (Round answers to 2 decimal places, e.g. 52.75.) Cash Received Bond Amortization Table Interest Income Premium Amortization Carrying Amount of Bonds
Transcribed Image Text:On January 1, 2021, Ayayai Ltd. paid $238,831.09 for 12% bonds of Variation Ltd. with a maturity value of $222,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2021, mature on January 1, 2026, and pay interest each December 31. Ayayai acquired the bond investment as part of its portfolio of trading securities and it accounts for the bonds at FV-NI, following IFRS. At December 31, 2021, Ayayai's year end, the bonds had a fair value of $237,300.00. During 2022, the economic outlook related to Variation's primary business took a major downturn, so that Variation's debt was downgraded. By the end of 2022, the bonds were priced at 85.5, and at December 31, 2023, they were selling in the market at 87. Conditions reversed in 2024 and the outlook for Variation significantly improved, leaving its bonds with a fair value of 99.5 at December 31, 2024. (a) Prepare a bond amortization table for the four-year period ended December 31, 2024. (Round answers to 2 decimal places, e.g. 52.75.) Cash Received Bond Amortization Table Interest Income Premium Amortization Carrying Amount of Bonds
(a) Prepare a bond amortization table for the four-year period ended December 31, 2024. (Round answers to 2 decimal places, e.g. 52.75.) Date 01/01/21 12/31/21 12/31/22 12/31/23 12/31/24 Cash Received $ Bond Amortization Table Interest Income LA Premium Amortization LA Carryi Amount of
Transcribed Image Text:(a) Prepare a bond amortization table for the four-year period ended December 31, 2024. (Round answers to 2 decimal places, e.g. 52.75.) Date 01/01/21 12/31/21 12/31/22 12/31/23 12/31/24 Cash Received $ Bond Amortization Table Interest Income LA Premium Amortization LA Carryi Amount of
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Derivatives and Hedge Accounting
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.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS