Financial Accounting: Tools for Business Decision Making, 8th Edition
8th Edition
ISBN: 9781118953808
Author: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Publisher: WILEY
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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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Peter Company purchased bonds at a discount of P5,000,000. Subsequently, Peter sold these bonds at a premium of P2,000,000. During the period that Peter held this investment, amortization of the discount amounted to P1,500,000. What amount should Peter report as gain on the sale of the bonds?
On July 1, 2002, Roger Co. paid P1,198,000 for 10% 20-year bonds with a face amount of P1,000,000. Interest is paid on December 31 and June 30. The bonds were purchased to yield 8%. Roger uses the effective interest method to recognize interest income from investment. What should be reported as carrying amount of the bonds in Roger’s December 31, 2002 balance sheet?
Starks products uses the cost method to account for investments in bonds. They purchased cash $150,000 of ice line inc, 6% bonds at 100 plus accrued interest of $1500. They then received a semiannual interest payment. I already have the answers for the above transactions.Â
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sold $90,000 of the bonds at 102 plus accrued interest of $900
Chapter AH Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
Ch. AH - Prob. 1QCh. AH - Prob. 2QCh. AH - Prob. 3QCh. AH - Prob. 4QCh. AH - What is the cost of an investment in stock?Ch. AH - Prob. 6QCh. AH - Prob. 7QCh. AH - Prob. 8QCh. AH - Prob. 9QCh. AH - Distinguish between the cost and equity methods of...
Ch. AH - What are consolidated financial statements?Ch. AH - What are the valuation guidelines for trading and...Ch. AH - Prob. 13QCh. AH - Prob. 14QCh. AH - Prob. 15QCh. AH - Prob. 16QCh. AH - Prob. 17QCh. AH - Prob. 18QCh. AH - Prob. H.1BECh. AH - Prob. H.2BECh. AH - Prob. H.3BECh. AH - Prob. H.4BECh. AH - Prob. H.5BECh. AH - Prob. H.6BECh. AH - Prob. H.7BECh. AH - Prob. H.8BECh. AH - Prob. H.1ECh. AH - Prob. H.2ECh. AH - Prob. H.3ECh. AH - Prob. H.4ECh. AH - Prob. H.5ECh. AH - Prob. H.6ECh. AH - Prob. H.7ECh. AH - Prob. H.8ECh. AH - Prob. H.1PCh. AH - Prob. H.2PCh. AH - Prob. H.3PCh. AH - Prob. H.4PCh. AH - Prob. H.5PCh. AH - Prob. H.6P
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