On July 1, 2018, Zia Inc. acquired investments in bonds of Ding Co.'s 10-year 12% bonds, with face value of $5,000,000, for $5,386,300. Interest is payable semi-annually on January 1 and July 1. The bonds mature on July 1, 2023. Bonds effective rate is 10%. On December 31, 2020, Zia Inc. sold its debt instrument at 110. How much gain should Zia Inc. recognize as a result of the disposal?
On July 1, 2018, Zia Inc. acquired investments in bonds of Ding Co.'s 10-year 12% bonds, with face value of $5,000,000, for $5,386,300. Interest is payable semi-annually on January 1 and July 1. The bonds mature on July 1, 2023. Bonds effective rate is 10%. On December 31, 2020, Zia Inc. sold its debt instrument at 110. How much gain should Zia Inc. recognize as a result of the disposal?
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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On July 1, 2018, Zia Inc. acquired investments in bonds of Ding Co.'s 10-year 12% bonds, with face value of $5,000,000, for $5,386,300. Interest is payable semi-annually on January 1 and July 1. The bonds mature on July 1, 2023. Bonds effective rate is 10%. On December 31, 2020, Zia Inc. sold its debt instrument at 110. How much gain should Zia Inc. recognize as a result of the disposal?
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