Sale of debt investment :Debt investments refer to the investments made in debts by the investor for which it lends funds to the borrowing company at a predetermined interest and the debt amount is repaid on the maturity date. For example, corporate bonds, government bonds, certificate of deposits. Gain on sale of debt investments: If the sale proceeds from sale of debt investments exceed the cost price of the debt investments, there is a gain on sale of investments. Loss on sale of debt investments: If the sale proceeds from sale of debt investments is less than the cost price of the debt investments, there is a loss on sale of investments. To explain: whether the recording of the sale of bonds by H Company is correct.

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Answer 1

Question

Chapter AH, Problem 4Q

To determine

Sale of debt investment:Debt investments refer to the investments made in debts by the investor for which it lends funds to the borrowing company at a predetermined interest and the debt amount is repaid on the maturity date. For example, corporate bonds, government bonds, certificate of deposits.

Gain on sale of debt investments: If the sale proceeds from sale of debt investments exceed the cost price of the debt investments, there is a gain on sale of investments.

Loss on sale of debt investments: If the sale proceeds from sale of debt investments is less than the cost price of the debt investments, there is a loss on sale of investments.

To explain: whether the recording of the sale of bonds by H Company is correct.

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Answer 2

Question

Chapter AH, Problem 4Q

To determine

Sale of debt investment:Debt investments refer to the investments made in debts by the investor for which it lends funds to the borrowing company at a predetermined interest and the debt amount is repaid on the maturity date. For example, corporate bonds, government bonds, certificate of deposits.

Gain on sale of debt investments: If the sale proceeds from sale of debt investments exceed the cost price of the debt investments, there is a gain on sale of investments.

Loss on sale of debt investments: If the sale proceeds from sale of debt investments is less than the cost price of the debt investments, there is a loss on sale of investments.

To explain: whether the recording of the sale of bonds by H Company is correct.

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Answer 3

Question

Chapter AH, Problem 4Q

To determine

Sale of debt investment:Debt investments refer to the investments made in debts by the investor for which it lends funds to the borrowing company at a predetermined interest and the debt amount is repaid on the maturity date. For example, corporate bonds, government bonds, certificate of deposits.

Gain on sale of debt investments: If the sale proceeds from sale of debt investments exceed the cost price of the debt investments, there is a gain on sale of investments.

Loss on sale of debt investments: If the sale proceeds from sale of debt investments is less than the cost price of the debt investments, there is a loss on sale of investments.

To explain: whether the recording of the sale of bonds by H Company is correct.

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Answer 4

Question

Chapter AH, Problem 4Q

To determine

Sale of debt investment:Debt investments refer to the investments made in debts by the investor for which it lends funds to the borrowing company at a predetermined interest and the debt amount is repaid on the maturity date. For example, corporate bonds, government bonds, certificate of deposits.

Gain on sale of debt investments: If the sale proceeds from sale of debt investments exceed the cost price of the debt investments, there is a gain on sale of investments.

Loss on sale of debt investments: If the sale proceeds from sale of debt investments is less than the cost price of the debt investments, there is a loss on sale of investments.

To explain: whether the recording of the sale of bonds by H Company is correct.

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Answer 5

Chapter AH, Problem 4Q

To determine

Sale of debt investment:Debt investments refer to the investments made in debts by the investor for which it lends funds to the borrowing company at a predetermined interest and the debt amount is repaid on the maturity date. For example, corporate bonds, government bonds, certificate of deposits.

Gain on sale of debt investments: If the sale proceeds from sale of debt investments exceed the cost price of the debt investments, there is a gain on sale of investments.

Loss on sale of debt investments: If the sale proceeds from sale of debt investments is less than the cost price of the debt investments, there is a loss on sale of investments.

To explain: whether the recording of the sale of bonds by H Company is correct.

Answer 6

Chapter AH, Problem 4Q

To determine

Sale of debt investment:Debt investments refer to the investments made in debts by the investor for which it lends funds to the borrowing company at a predetermined interest and the debt amount is repaid on the maturity date. For example, corporate bonds, government bonds, certificate of deposits.

Gain on sale of debt investments: If the sale proceeds from sale of debt investments exceed the cost price of the debt investments, there is a gain on sale of investments.

Loss on sale of debt investments: If the sale proceeds from sale of debt investments is less than the cost price of the debt investments, there is a loss on sale of investments.

To explain: whether the recording of the sale of bonds by H Company is correct.

Answer 7

Chapter AH, Problem 4Q

To determine

Sale of debt investment:Debt investments refer to the investments made in debts by the investor for which it lends funds to the borrowing company at a predetermined interest and the debt amount is repaid on the maturity date. For example, corporate bonds, government bonds, certificate of deposits.

Gain on sale of debt investments: If the sale proceeds from sale of debt investments exceed the cost price of the debt investments, there is a gain on sale of investments.

Loss on sale of debt investments: If the sale proceeds from sale of debt investments is less than the cost price of the debt investments, there is a loss on sale of investments.

To explain: whether the recording of the sale of bonds by H Company is correct.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. AH - Prob. 1Q Ch. AH - Prob. 2Q Ch. AH - Prob. 3Q Ch. AH - Prob. 4Q Ch. AH - What is the cost of an investment in stock?Ch. AH - Prob. 6Q Ch. AH - Prob. 7Q Ch. AH - Prob. 8Q Ch. AH - Prob. 9Q Ch. AH - Distinguish between the cost and equity methods of...

Solution Summary: The author explains the difference between the cash proceeds from bonds and the cost of the bonds excluding the accrued interest of 1,000.

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Chapter AH Solutions