Dhapa Exercise 14-29 (Algo) Reporting bonds at fair value [LO14-6]Federal Semiconductors issued 11% bonds, dated January 1, with a face amount of $830 million on January1, 2024.. The bonds sold for $767,557,868 and mature on December 31, 2043 (20 years).• For bonds of similar risk and maturity the market yield was 12%.• Interest is paid semiannually on June 30 and December 31.• Federal determines interest at the effective rate.• Federal elected the option to report these bonds at their fair value.• On December 31, 2024, the fair value of the bonds was $750 million as determined by their marketvalue in the over-the-counter marketAssume the fair value of the bonds on December 31, 2025, had risen to $756 million.Required:Complete the below table to record the following journal entries1. & 2. Prepare the journal entries to record interest on June 30, 2024, December 31, 2024, and adjust thebonds to their fair value for presentation in the December 31, 2024 balance sheet, and record interest onJune 30, 2025, December 31, 2025, and adjust the bonds to their fair value for presentation in theDecember 31, 2025, balance sheet. Federal determined that none of the change in fair value in 2024 wasdue to a decline in general interest rates and one-half of the increase in fair value in 2025 was duedecline in general interest rates.Complete this question by entering your answers in the tabs below.aCalculationGeneralJournalComplete the below table to determine the amounts for the journal entries.Note: Negative amount should be indicated by a minus sign. Round intermediate calculations and final answers to the nearest whole dollars.SemiannualInterestPeriod-EndCash Interest Bond InterestPaidExpenseIncrease inBalanceCarrying ValueFair Value01/01/202406/30/2024$ 767,557,868Fair valueadjustmentbalance neededS0Increase(decrease)in Fair valueadjustment

Bonds payable is a type of instrument where by an amount is borrowed for a fixed period with fixed…

Federal Semiconductors issued 11% bonds, dated January 1, with a face amount of $830 million on January 1, 2024. ⚫ The bonds sold for $767,557,868 and mature on December 31, 2043 (20 years). • For bonds of similar risk and maturity the market yield was 12%. • Interest is paid semiannually on June 30 and December 31. • Federal determines interest at the effective rate. ⚫ Federal elected the option to report these bonds at their fair value. ⚫ On December 31, 2024, the fair value of the bonds was $750 million as determined by their market value in the over-the-counter market

Federal Semiconductors issued 11% bonds, dated January 1, with a face amount of $830 million on January 1, 2024. ⚫ The bonds sold for $767,557,868 and mature on December 31, 2043 (20 years). • For bonds of similar risk and maturity the market yield was 12%. • Interest is paid semiannually on June 30 and December 31. • Federal determines interest at the effective rate. ⚫ Federal elected the option to report these bonds at their fair value. ⚫ On December 31, 2024, the fair value of the bonds was $750 million as determined by their market value in the over-the-counter market

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 68E: Exercise Bonds with Annual Interest Payments Kiwi Corporation issued at par $350,000, 9% bonds on...

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