On January 1, 20x1, SPEED Company purchased 12% bonds, having a face value of P800,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 20x1, and mature January 1, 20x6, with interest payments on December 31 of each year. Speed's business model is to hold these bonds for collection and sale. The fair value of the bonds at each ycar end respectively was at 104, 102, 103, 98, and 101. Complete the amortization table for this investment below: Collection Interest Income Amortization Balance (1) (3) 839,789 (6) (8) 800,000 Jan. 1, 20x1 Dec. 31, 20x1 9,935 (4) 12,021 (7) (10) 96,000 96.000 (2) 85.072 Dec. 31, 20x2 Dec. 31, 20x3 Dec. 31, 20x4 Dec. 31, 20x5 96,000 96,000 96.000 (5) 82,777 (9) How much is the unrealized gain(loss) as part of OCI for the year ended 20x1?
On January 1, 20x1, SPEED Company purchased 12% bonds, having a face value of P800,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 20x1, and mature January 1, 20x6, with interest payments on December 31 of each year. Speed's business model is to hold these bonds for collection and sale. The fair value of the bonds at each ycar end respectively was at 104, 102, 103, 98, and 101. Complete the amortization table for this investment below: Collection Interest Income Amortization Balance (1) (3) 839,789 (6) (8) 800,000 Jan. 1, 20x1 Dec. 31, 20x1 9,935 (4) 12,021 (7) (10) 96,000 96.000 (2) 85.072 Dec. 31, 20x2 Dec. 31, 20x3 Dec. 31, 20x4 Dec. 31, 20x5 96,000 96,000 96.000 (5) 82,777 (9) How much is the unrealized gain(loss) as part of OCI for the year ended 20x1?
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter11: Notes, Bonds, And Leases
Section: Chapter Questions
Problem 18E
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Question
Q1: How much is the unrealized gain (loss) as part of OCI for the year ended 20x1?
Q2: How much is the unrealized gain (loss) as component of equity as of December 31, 20x2?
Transcribed Image Text:Problem 15
On January 1, 20x1, SPEED Company purchased 12% bonds, having a face value of P800,000. The bonds provide the bondholders with a 10% yield. They are dated January 1, 20x1, and mature January
1, 20x6, with interest payments on December 31 of each year. Speed's business model is to hold these bonds for collection and sale. The fair value of the bonds at each year end respectively was at 104,
102, 103, 98, and 101.
Complete the amortization table for this investment below:
Collection
Interest Income
Amortization
Balance
(1)
(3)
839 789
Jan. 1. 20x1
Dec. 31, 20x1
Dec. 31, 20x2
Dec. 31, 20x3
Dec. 31, 20x4
Dec. 31, 20x5
96.000
96,000
96.000
96,000
9,935
(4)
12,021
(7)
(10)
(2)
85.072
(5)
82,777
(6)
(8)
800,000
96.000
(9)
86. How much is the unrealized gain(loss) as part of OCI for the year ended 20x1?
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