Connect Access Card for Financial Accounting: Information and Decisions
8th Edition
ISBN: 9781259662966
Author: John J Wild
Publisher: McGraw-Hill Education
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The following investment account was taken from the general ledger of One Dream Investment Company:
Debt Investments - Fulfilled Dream 6% bonds (2,000,000 face value, due December 31, 2027)
Date
PR
Debit
Credit
Balance
January2, 2022
VR
VR P1,812,300
P1,812,300
June 30, 2022
CRJ
60,000
1,752,300
Dec. 31, 2022
CRJ
60,000
1,692,300
Dec. 31, 2022
195,000
1,497,300
In the course of your examination, you obtained the following information:
Interest checks were received on June 30 and December 31 and were credited to the investment account.
One dream sold P200,000 of its investment on December 31, 2022 for P195,000.
Effective interest rate on this investment, as computed by your audit staff, is 8%. (4% - semi annual)
One Dream included this investment in a portfolio that is held to collect and for sale.
The fair value at December 31, 2022 and 2023 is 97.5 and 105, respectively.
How much is the gain or…
Problem 1
On July 1, 2014, Norren Company paid P1, 198, 000 for 10% bonds with a face amount of P1, 000, 000 to be
held to maturity. Interest is paid on June 30 and December 31. The bonds were purchased to yield 8%. The
entity used the effective interest method to recognize interest income from this investment. What is the carrying
amount of the bond investment on December 31, 2014?
a. 1, 207, 900 b. 1, 198, 000 c. 1, 195, 920 d. 1, 193, 050
Question Content Area
On April 1, 2017 the Reba Company purchased 10%, $800,000 bonds of the Trading Up Company at par plus accrued interest. These bonds were classified as an investment in trading securities. The bonds pay interest on June 30 and December 31 each year. The entry by Reba on April 1, 2017, would include a
debit to Investment in Trading Securities of $820,000
debit to Interest Expense of $20,000
credit to Interest Income of $20,000
credit to Cash of $820,000
Chapter C Solutions
Connect Access Card for Financial Accounting: Information and Decisions
Ch. C - Under what two conditions should investments be...Ch. C - Prob. 2DQCh. C - Prob. 3DQCh. C - Identify the three classes of debt investments and...Ch. C - Prob. 5DQCh. C - Prob. 6DQCh. C - Prob. 7DQCh. C - Prob. 8DQCh. C - Prob. 9DQCh. C - Prob. 10DQ
Ch. C - Prob. 11DQCh. C - Prob. 12DQCh. C - Prob. 13DQCh. C - Prob. 14DQCh. C - Prob. 15DQCh. C - Prob. 16DQCh. C - Prob. 17DQCh. C - Which of the following statements a through g are...Ch. C - Prob. 2QSCh. C - Prob. 3QSCh. C - Prob. 4QSCh. C - Prob. 5QSCh. C - Prob. 6QSCh. C - Prob. 7QSCh. C - Prob. 8QSCh. C - Prob. 9QSCh. C - Prob. 10QSCh. C - Prob. 11QSCh. C - Prob. 12QSCh. C - Prob. 13QSCh. C - Prob. 14QSCh. C - Prob. 15QSCh. C - Prob. 16QSCh. C - Prob. 17QSCh. C - Prob. 1ECh. C - Prob. 2ECh. C - Prob. 3ECh. C - Prob. 4ECh. C - Prob. 5ECh. C - Prob. 6ECh. C - Prob. 7ECh. C - Prob. 8ECh. C - Prob. 9ECh. C - Prob. 10ECh. C - Prob. 12ECh. C - Prob. 13ECh. C - Prob. 14ECh. C - Prob. 15ECh. C - Prob. 16ECh. C - Prob. 2PSACh. C - Prob. 6PSACh. C - Prob. 2PSBCh. C - Prob. 3PSBCh. C - Prob. 5PSBCh. C - Prob. 6PSBCh. C - Prob. CSPCh. C - Prob. 4BTNCh. C - Prob. 9BTN
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