Please answer NUMBER 1 AND SHOW YOUR SOLUTION held for trading. On December 31, 2015, the bonds are quoted at 104%.On January 1, 2015, Virginia Co. acquired a 5-year bonds with a total face valof P5,000,000 for P5,379,079. The bonds carry an interest of 12% per yearOn November 1, 2016, Virginia Co. changed its business model. It :payable every December 31. The bonds are to be appropriately classified 2;determined that the remaining investment in bonds should be reclassified tPROBLEM 15-6 Initial and Subsequent measurement, Derecognition cfinancial asset measured at amortized cost on reclassification date. COndReclassification of Trading Debt SecuritiesOn January 3, 2016, the ½ of the bonds were sold at 105.December 31, 2016, the bonds are quoted at 102.On January 1, 2017, the bonds were quoted at 104.Questions:Based on the above data, answer the following:CASE NO. 1- Assume the above data:1.How much is the interest income for 2015?c. P600,000d. P645,489a.Nilb. P537,908

When an asset or liability is held for trading it should be accounted using FVTPL

held for trading. On December 31, 2015, the bonds are quoted at 104%. of P5,000,000 for P5,379,079. The bonds carry an interest of 12% per year On January 1, 2015, Virginia Co. acquired a 5-year bonds with a total face val payable every December 31. The bonds are to be appropriately classified as determined that the remaining investment in bonds should be reclassified PROBLEM 15-6 Initial and Subsequent measurèment, Derecognition financial asset measured at amortized cost on reclassification date Cn On November 1, 2016, Virginia Co. changed its business model. t ond Reclassification of Trading Debt Securities On January 3, 2016, the 2 of the bonds were sold at 105. December 31, 2016, the bonds are quoted at 102. On January 1, 2017, the bonds were quoted at 104. Questions: Based on the above data, answer the following: CASE NO. 1- Assume the above data: 1. How much is the interest income for 2015? c. P600,000 d. P645,489 a. Nil P537.908

held for trading. On December 31, 2015, the bonds are quoted at 104%. of P5,000,000 for P5,379,079. The bonds carry an interest of 12% per year On January 1, 2015, Virginia Co. acquired a 5-year bonds with a total face val payable every December 31. The bonds are to be appropriately classified as determined that the remaining investment in bonds should be reclassified PROBLEM 15-6 Initial and Subsequent measurèment, Derecognition financial asset measured at amortized cost on reclassification date Cn On November 1, 2016, Virginia Co. changed its business model. t ond Reclassification of Trading Debt Securities On January 3, 2016, the 2 of the bonds were sold at 105. December 31, 2016, the bonds are quoted at 102. On January 1, 2017, the bonds were quoted at 104. Questions: Based on the above data, answer the following: CASE NO. 1- Assume the above data: 1. How much is the interest income for 2015? c. P600,000 d. P645,489 a. Nil P537.908

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 8E

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Similar questions

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On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
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On July 2, 2018, McGraw Corporation issued 500,000 of convertible bonds. Each 1,000 bond could be converted into 20 shares of the companys 5 par value stock. On July 3, 2020, when the bonds had an unamortized discount of 7,400 and the market value of the McGraw shares was 52 per share, all the bonds were converted into common stock. Required: 1. Prepare the journal entry to record the conversion of the bonds under (a) the book value method and (b) the market value method. 2. Compute the companys debt-to-equity ratio (total liabilities divided by total shareholders equity, as described in Chapter 6) under each alternative. Assume the companys other liabilities are 2 million and shareholders equity before the conversion is 3 million. 3. Assume the company uses IFRS and issued the bonds for 487,500 on July 2, 2018. On this date, it determined that the fair value of each bond was 930 and the fair value of the conversion option was 45 per bond. Prepare the journal entry to record the issuance of the bonds.