ADVANCED FINANCIAL ACCT.(LL) >CUSTOM<
12th Edition
ISBN: 9781260824292
Author: Christensen
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 8, Problem 8.1C
a.
To determine
Introduction: Bond is an instrument issued by the companies to fulfil their need of large amount of borrowings. It is the instrument of indebtedness where issuer is obliged to pay the interest on it.
The bond transactions recorded by the given three companies.
b.
To determine
Introduction: Bond is an instrument issued by the companies to fulfil their need of large amount of borrowings. It is the instrument of indebtedness where issuer is obliged to pay the interest on it.
The recording of gain or loss on bond retirement by C and when it should be recorded.
c.
To determine
Introduction: Bond is an instrument issued by the companies to fulfil their need of large amount of borrowings. It is the instrument of indebtedness where issuer is obliged to pay the interest on it.
The income assigned to B’s non-controlling shareholders should be affected or not and in which year.
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Entries for bond (held-to-maturity) investments
Bula Investments acquired $264,000 of Effenstein Corp., 9% bonds at their face amount on October 1, 20Y1. The bonds pay interest on October 1 and April 1. On April 1, 20Y2, Bula sold $118,000 of Effenstein Corp. bonds at 104.
Journalize the entries to record the following selected transactions:
a. The initial acquisition of the Effenstein Corp. bonds on October 1, 20Y1.
b. The adjusting entry for 3 months of accrued interest earned on the Effenstein Corp. bonds on December 31, 20Y1.
c. The receipt of semiannual interest on April 1, 20Y2.
d. The sale of $118,000 of Effenstein Corp. bonds on April 1, 20Y2, at 104.
e. The receipt of the face value of the remaining bonds at their maturity on October 1, 20Y8.
On September 1, Year 2, the 401 Company acquired P1,000,000 face value, 12% bonds of Key Company at 104. The bonds
were dated May 1, Year 2, and mature on april 30, Year 5, with interest payable each October 31 and April 30. The
company did not elect to measure the securities at fair value.
What entry should 401 Company make to record the purchase of the bonds on September 1, Year 2?
Debt Investments
1,080,000
Cash
1,080,000
Debt Investments
1,000,000
B) Premium on Debt Inv.
80,000
Cash
1,080,000
Debt Investments
1,080,000
(c
Interest Receivable
40,000
Cash
1,040,000
Debt Investments
1,040,000
D Interest Receivable
40,000
Cash
1,080,000
4. ABC Company , a holder of P1,000,000 XYZ Company bonds, collected the interest due on March 31, year 1, and then sold the bonds to W, Inc. for P975,000. On that date, XYZ, a 75% owner of W had P1,075,000 carrying amount for the bonds. What was the effect of W's purchase of XYZ's bond on the retained earnings amount reported in XYZ's March 31, year 1 consolidated balance sheet?
5. What was the effect of W's purchase of XYZ's bond on the noncontrolling interest amount reported in XYZ's March 31, year 1 consolidated balance sheet? (Answer format: amount increase/decrease e.g. 10000 decrease, if no effect, just type 0)
Chapter 8 Solutions
ADVANCED FINANCIAL ACCT.(LL) >CUSTOM<
Ch. 8 - Prob. 8.1QCh. 8 - What is meant by a constructive bond retirement in...Ch. 8 - Prob. 8.3QCh. 8 - Prob. 8.4QCh. 8 - When a parent company sells land to a subsidiary...Ch. 8 - Prob. 8.7QCh. 8 - Prob. 8.8QCh. 8 - Prob. 8.9QCh. 8 - Prob. 8.10QCh. 8 - Prob. 8.11Q
Ch. 8 - How is the amount of income assigned to the...Ch. 8 - Prob. 8.13QCh. 8 - How would the relationship between interest income...Ch. 8 - Prob. 8.15QCh. 8 - Prob. 8.16QCh. 8 - Prob. 8.17QCh. 8 - Prob. 8.18QCh. 8 - Prob. 8.1CCh. 8 - Prob. 8.2CCh. 8 - Prob. 8.4CCh. 8 - Prob. 8.1ECh. 8 - Bond Sale from Parent to Subsidiary (StraightLine...Ch. 8 - Computation of Transfer Price (Effective Interest...Ch. 8 - Prob. 8.2AECh. 8 - Prob. 8.3ECh. 8 - Bond Sale at Discount (Straightline Method) Assume...Ch. 8 - Evaluation of Intercorporate Bond Holdings...Ch. 8 - Prob. 8.5.1ECh. 8 - Prob. 8.5.2ECh. 8 - MultipleChoice Questions (Effective Interest...Ch. 8 - Prob. 8.5.4ECh. 8 - Prob. 8.5.5ECh. 8 - Prob. 8.5.6ECh. 8 - Prob. 8.5.1AECh. 8 - Prob. 8.5.2AECh. 8 - Prob. 8.5.3AECh. 8 - Prob. 8.5.4AECh. 8 - Prob. 8.6.1ECh. 8 - Prob. 8.6.2ECh. 8 - MultipleChoice Questions (Effective Interest...Ch. 8 - Prob. 8.6.1AECh. 8 - Prob. 8.6.2AECh. 8 - Prob. 8.6.3AECh. 8 - Prob. 8.7ECh. 8 - Prob. 8.7AECh. 8 - Prob. 8.8ECh. 8 - Prob. 8.8AECh. 8 - Prob. 8.9ECh. 8 - Prob. 8.9AECh. 8 - Prob. 8.10ECh. 8 - Prob. 8.10AECh. 8 - Prob. 8.11ECh. 8 - Prob. 8.11AECh. 8 - Evaluation of Bond Retirement (Effective Interest...Ch. 8 - Prob. 8.12AECh. 8 - Prob. 8.13ECh. 8 - Prob. 8.13AECh. 8 - Prob. 8.14PCh. 8 - Prob. 8.14APCh. 8 - Prob. 8.15PCh. 8 - Prob. 8.15APCh. 8 - Prob. 8.16PCh. 8 - Prob. 8.16APCh. 8 - Prob. 8.17PCh. 8 - Prob. 8.17APCh. 8 - Prob. 8.18PCh. 8 - Prob. 8.18APCh. 8 - Prob. 8.19APCh. 8 - Prob. 8.20PCh. 8 - Prob. 8.20APCh. 8 - Prob. 8.21PCh. 8 - Prob. 8.21APCh. 8 - Prob. 8.22APCh. 8 - Prob. 8.22BPCh. 8 - Prob. 8.23PCh. 8 - Prob. 8.23APCh. 8 - Prob. 8.24PCh. 8 - Prob. 8.24APCh. 8 - Intercorporate Inventory and Debt Transfers...Ch. 8 - Intercorporate Inventory and Debt Transfers...Ch. 8 - Prob. 8.26PCh. 8 - Prob. 8.26APCh. 8 - Prob. 8.27.1BPCh. 8 - Prob. 8.27.2BPCh. 8 - Prob. 8.27.3BPCh. 8 - Prob. 8.27.4BPCh. 8 - Prob. 8.27.5BPCh. 8 - Prob. 8.27.6BPCh. 8 - Prob. 8.27.7BPCh. 8 - Prob. 8.27.8BPCh. 8 - Prob. 8.27.9BPCh. 8 - Prob. 8.27.10BPCh. 8 - Prob. 8.28PCh. 8 - Prob. 8.28APCh. 8 - Prob. 8.29BPCh. 8 - Prob. 8.30BP
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