On January 1, 2020, Apple Co. purchased held-for-collection and sales bonds par value $2,000,000, 9% paying $1,920,000. The bonds mature on January 1, 2025, and pay interest on July 1 and January 1. Apple Co. sells these bonds on January 1, 2023, for €2,025,000, after the interest has been received. If the carrying value of the bonds at the selling date was €1,966,500. Apple Co. uses effective interest amortization (10% effective interest rate). The gain on the sale is: 0000 A. €80,000. B. €25,000. C. €58,500. D. €33,500.
On January 1, 2020, Apple Co. purchased held-for-collection and sales bonds par value $2,000,000, 9% paying $1,920,000. The bonds mature on January 1, 2025, and pay interest on July 1 and January 1. Apple Co. sells these bonds on January 1, 2023, for €2,025,000, after the interest has been received. If the carrying value of the bonds at the selling date was €1,966,500. Apple Co. uses effective interest amortization (10% effective interest rate). The gain on the sale is: 0000 A. €80,000. B. €25,000. C. €58,500. D. €33,500.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 1MC
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