On January 1, 20x1, Impressed Co. acquired 8%, ₱1,000,000 face amount, 4-year ‘term’ bonds for ₱936,603. The bonds are measured at amortized cost and have a yield rate of 10%. How much is the carrying amount of the investment on December 31, 20x2?

On January 1, 20x1, Impressed Co. acquired 8%, ₱1,000,000 face amount, 4-year ‘term’ bonds for ₱936,603. The bonds are measured at amortized cost and have a yield rate of 10%. How much is the carrying amount of the investment on December 31, 20x2?

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: 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: Crane Company issued $850000 of 8%, 5-year bonds at 109, which pay interest annually. Assuming…

A: Bonds High-security debt instruments known as bonds allow an organization to raise money and meet…

Q: Alton Corp. purchased five $1,000 5% bonds of Solar Corporation when the market rate of interest was…

A: Price of the bond will be equal to the sum of present values of each future coupon payment and the…

Q: On January 1, 20x1, ABC Co. issued 1,000, ₱4,000, 12%, 3-year bonds. Principal is due on December…

A: Present Value of bond = Present value of Interest payment + Present value of Maturity Value = ( 4000…

Q: Quimby Corp. purchased ten $1,000 7% bonds of Circuit Corporation when the market rate of interest…

A: Face value or maturity value = Z = $1,000Semiannual coupon amount = C = $35 (i.e. $1000 * 0.07 /…

Q: Lowfood Corporation issued 10-year USD5,000,000 8 percent bonds on March 1, 2012, with a maturity…

A: The bonds are treated as a long-term liability because there are to be paid in more than a year. The…

Q: Use the following information for the next four questions: On Jan. 1, 20x1, Red Co. acquires…

A: Introduction :- Ball Co. bonds with a face value of 500,000 and a 10% interest rate are purchased by…

Q: The amortization entry at Dec 31, 20X2 will include: PV of P1 at 12% for 3n = . 71178…

A: PV of Bonds = PV of Interest Payments + PV of Principal Payment PV of Interest Payments = Annual…

Q: Fuzzy Monkey Technologies, Incorporated purchased as a long-term Investment $110 million of 10%…

A: Investment in bonds can be made at par, premium, or discount. If the purchase cost equals the bond…

Q: Record journal entries that the company would record during 20X1 if the company accounts for this…

A: Given in the question: Face Value $100,000 Stated Interest Rate 6% Interest is paid…

Q: the carrying value of the bonds after one year?

A: Here is the calculation for the above question.

Q: On January 1, 20x1, SPEED Company purchased 12% bonds, having a face value of P800,000. The bonds…

A: Bond is an investment security which is issued by large organizations to raise the fund. The bond…

Q: the separately, prep vak s journal y for the December 31 interest accrual. (Round answers to 2…

A: FV_NI stands for "Fair Value through Net Income." Accounting for securities under FV_NI is a method…

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: HaddockCorp. purchased fifteen $1,000 7% bonds of Galvan Corporation when the market rate ofinterest…

A: Determining the price of a bond: Bond prices fluctuate on the open market in response to supply and…

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: Prepare the relevant entries for the whole tenure.

A: Investment in the debt instrument Debt amortized cost- An amortized bond is one in which the face…

Q: what is the carrying value of the bonds after one year?

A: Carrying Value of Bonds It is the total of bond's face value and any un-amortized premiums or…

Q: On January 1, 20x1, ABC Co. issued its 8%, ₱2,000,000 bonds. Principal is due on December 31, 20x3…

A: Effective Interest method: It is a method of bond amortization. This method takes into account two…

Q: Cullumber Company issued $510000 of 8% 5-year bonds at 107, which pay interest annually Assuming…

A: Lets understand the basics. There are two method for amortizing bond premium/discount which are, (1)…

Q: On January 1, 20x1, ABC Co. issued its 8%, ₱2,000,000 bonds. Principal is due on December 31, 20x3…

A: Here the bonds issued by ABC CO. is a financial instrument (Financial liability). So for the purpose…

Q: Cullumber Company purchased 9-year, 9% bonds that pay interest semiannually. The bonds are sold to…

A: Bond price at present can be found by using the PVIFA table for a given interest rate, number of…

Q: Consolidated Enterprises issues €10 million face value, fi ve-year bonds with a couponrate of 6.5…

A: Given information: Face value of bond issues at 10 million euros Bond life is 5 years Market…

Q: On October 1, Novak Ltd. purchased 9% bonds with a face value of $1,000 for trading purposes,…

A: Accured Interest is that amount which is earned by the investor but not received till the close of…

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: ABC Company sold $10,000,000 of 30 year, 4% bands at a price to yield 2.5%. The bonds pay interest…

A: Bonds are debt instruments issued by companies. The company which issues the bonds pays periodic…

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: Báll Co. for P487,656. Red Co. i al to 5% of the face amount of the bon 31, 20x3 and pay annual…

A: Bonds refers to a financial instrument which reflect the promise made by the borrower to pay off the…

Q: On January 1, 20x1, ABC Co. issued 1,000, ₱4,000, 12%, 3-year bonds. Principal is due on December…

A: Bond In other terms, a bond serves as a contract between the investor and the borrower. A bond is a…

Q: Barnwell Corp. purchased ten $1,000 7% bonds of Geotherm Corporation when the market rate of…

A: The question is based on the concept of Security Management.Bonds are debt instruments issued by…

Q: Dexter Inc. has $1,000,000 in face value bonds with a 6% stated interest rate outstanding. The bonds…

A: Interest Expense = Carrying Value x Effective Interest rate x TimeCash Payment of Interest = Face…

Q: Company's 5-year bonds are selling at P820. The bonds face amount is P1,000 and pays an annual…

A: Bonds are long term source of finance for the company and very cheap source of finance because after…

Q: A corporation sold an issue of 20-year bonds, having a total face value of P10M for P 9.5M. The…

A: Data given: FV=P 10M r=16% (payable semiannually)=16%/2 =8% i=12% (compounded semiannually)=12%/2=6%…

Q: A Corporation sold an issue of 15-year bonds, having a total face value of P12,000,000 for…

A: Sinking Fund - A Sinking fund is a type of fund that is created and set up purposely for repaying…

Q: On 3/1/21, Lansing Company sold 6.5% bonds having a maturity value of $800,000 at a price which…

A: A bond issue requires multiple stages to be accounted for. An outline of the procedure is given…

Question

On January 1, 20x1, Impressed Co. acquired 8%, ₱1,000,000 face amount, 4-year ‘term’ bonds for
₱936,603. The bonds are measured at amortized cost and have a yield rate of 10%. How much is the
carrying amount of the investment on December 31, 20x2?

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

On 1 January 20X5, Franco Ltd. purchased $440,000 of Gentron Company 7.00% bonds. The bonds pay semi-annual interest each 30 June and 31 December. The market interest rate was 8% on the date of purchase. The bonds mature on 31 December 20X10. The company has a 31 December year-end. Required: 1. Calculate the price paid by Franco Ltd. (Do not round Intermediate calculations. Round your final answer to the nearest dollar amount.) Price paid Period 2. Assume that the bond is classified as an AC investment. Construct a table that shows interest revenue reported by Franco, and the carrying value of the investment, for four interest periods. Use the effective-interest method. (Do not round Intermediate calculations. Round your final answers to the nearest dollar amount.) 0 $ 1 2 3 4 Cash Payment 361,607 View transaction list Interest Revenue Amortization Bond Carrying Value 3. Prepare the entries for the first four interest periods based on your calculations in requirement 2. (If no entry is…
HodsonCorp. purchased ten $1,000 8% bonds of Eagle Corporation when the market rate of interestwas 6%. Interest is paid semiannually, and the bonds will mature in four years. Using the PVfunction in Excel®, compute the price Hodson paid (the present value) for the bond investment.
Durable Co.’s December 30, 20X0, balance sheet contained the following items in the long-term liabilities section: Unsecured 9.375% registered bonds (P25,000 maturing annually beginning in 20x4) ₱275,000 11.5% convertible bonds, callable beginning in 20x9, due 2010 125,000 Secured 9.875% guarantee security bonds, due 2x10 ₱250,000 10.0% commodity backed bonds (P50,000 maturing annually beginning in 20x5) 200,000 What are the total amounts of serial bonds and debenture bonds?
Rancho PLC has in issue K400,000 8% debentures redeemable in 5 years’ time at a premium of 10%. Investors require a return of 12% per annum. Calculate the market value of the debt.
Hodson Corp. purchased fifteen $1,000 3% bonds of Power Source Corporation when the market rate of interest was 10%. Interest is paid semiannually, and the bonds will mature in eight years. Using the PV function in Excel, compute the price Hodson paid (the present value) for the bond investment. (Assume that all payments of interest and principal occur at the end of the period. Round your answer to the nearest cent.) Hodson paid on the bond investment.
On January 1, 20x1, Etsy Co. purchased 10%, P4,000,000 bonds for P4,171,968. The bonds are classified as financial asset measured at amortized cost. Principal on the bonds mature in four equal annual installments starting December 31, 20x1. Interest is due annually at each year-end. The effective interest rate on the bonds is 8%. How much is the current portion of the investment on December 31, 20x1?
If $1,000,000 of 8% bonds are issued at 102 3/4, the amount of cash received from the sale is
At the end of the year, the company purchased as a long-term investment P 10,000, 10% bonds to yield 8% per year. The bonds mature on January 1, five years after, and pay interest semiannually on June 30 and December 31. The present value factors are as follows: Present value of 1 at 4% for 10 periods 0.6756 Present value for an ordinary annuity at 4% for 10 periods 8.11 Present value of 1 at 5% for 10 periods 0.6139 Present value for an ordinary annuity at 5% for 10 periods 7.72 The carrying amount of this investment at year end is
jitu
INVESTMENT AT AMORTIZED COST CASE III: On January 1, 2026, ABC purchased 9% bonds with a face amount of P4M to yield 10%. The bonds are dated January 1, 2026, 2024, mature on December 31, 2035 and pay interest annually on December 31. The entity used the interest method. What should be reported as interest revenue for 2026?
37. On January 1, 20x1, Impressed Co. acquired 8%, F1,000,000 face amount, 4-year 'term' bonds for P936,603. The bonds are measured at amortized cost and have a yield rate of 10%. How much is the carrying amount of the investment on December 31, 20x2? a. 1,000,000 b. 950,263 c. 965,289 d. 981,818
The final accounts of business concern generally include how many parts a One b. Two C Three d. Four