What is the initial measurement of 2. Assuming the quoted price of the bonds is not determinable, what is the initial measurement of the building? a. P2,000,000 b. Zero c. P1,900,000 d. P2,020,000 Assuming both the quoted price of and th Tuo of th building 1. the building? 3. the a. P1,900,000 b. Zero C. P2,000,000 d. P2,020,000
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- On April 1, 2019, Padayon Co. acquired a 5-year bond with a face value of P1,200,000 and stated interest of 10% per year payable annually on December 31. The bonds were acquired to yield 12%. The bonds are to be appropriately classified as financial asset at amortized cost.What is the carrying value of the investment as of March 31, 2020? * a. 1,116,375 b. 1,117,716 c. 1,127,104 d. 1,140,515On February 18, 2021, Union Corporation purchased 1,311 IBM bonds as a long-term investment at their face value for a total of $1,311,000. Union will hold the bonds indefinitely, and may sell them if their price increases sufficiently. On December 31, 2021, and December 31, 2022, the market value of the bonds was $1,273,000 and $1,330,000, respectively. Required: 2. & 3. Prepare the adjusting entry for December 31, 2021 and 2022. (If no entry is required for aOn January 1, 2020, EF company purchased P1,000,000, 12% bonds for P1,065,000, a price that yields 10%. The bonds pay interest semi-annually every January 1and July 1. At December 31, 2020, each bonds is selling at P1,055.If the debt investments is classified as at amortized cost, what is the interest revenue from the bond investment for the year 2020?
- Walker Incorporated sold $500,000 of 10% bonds on January 1, 2020 for a price that yields a12% interest rate. The bonds pay interest semi-annually on June 30 and December 31. Thebonds are due December 31, 2024. Walker uses the effective interest method.Instructions:1. Determine the selling price of the bonds on January 1, 2020.2. Prepare an amortization schedule using the effective interest method.3. Prepare the journal entries for 2020.4. Assume the company reacquired the bonds on July 1, 2023, at 104 and prepare journal entryto record the retirement of the bonds.5. Assume Walker Incorporated used the straight-line method to amortize the premium ordiscount. Prepare the journal for June 30, 2020 to record interest expense.On January 01, 2019, SUNOD NA ANG LEASES LTD. issued 3-year bonds with face value of P5,000,000 at 99. The nominal rate is 10% and the interest is payable annually on December 31. Additionally, it paid bond issue cost of P150,000. Suppose the bonds were issued in the amount of P5,407,550. What is the present value of the bonds? a. P5,000,000 at face amount since as a general rule, when the problem is silent, stated rate is equal to effective rate. b. P5,407,550 is the present value. Bond issue cost should be included in the computation of the present value since under the effective interest method; this cost should be lumped together with the discount, or netted against the premium, as the case may be. c. P5,257,550 is the present value. With the nominal rate at 10%, it is understood that the bonds were issued at a premium to be amortized using the rate contained in the bond certificate. d. None of the scenarios above is correct. They are just simply…On December 31, 2020, Whitfield Corp. issued $ 400,000 10% bonds, due on December 31, 2025. Interest is to be paid semi-annually on June 30 and December 31. The bonds were sold at a market value of $432,444 to yield 8% effective annual interest. Whitfield has a calendar year-end.Required:1. Complete the following amortization schedule for the dates indicated. Show to the second decimal place (dollars and cents). Use the effective-interest method.
- Cookie Dough Corporation issued $850,000 in 9%, 10-year bonds (payable on December 31, 2030) on January 1, 2021, for $907,759. Interest is paid on June 30 and December 31. The market rate of interest is 8%. Required: Prepare the amortization table through December 31, 2023, using the effective interest rate method. If an amount box does not require an entry, leave it blank and if the answer is zero, enter "0". If required, round your answers to the nearest whole dollarOn January 1, 2020, Andrea Company purchased bonds with face value of P8,000,000 for P7,679,000. The stated rate on the bonds is 10% but the bonds are acquired to yield 12%. The bonds mature at the rate of P2,000,000 annually every December 31 and the interest is payable annually also every December 31. The entity uss the effective interest method for amortizing discount. What is the carrying amount of the investment at year-ended December 31, 2021? (Round off to the nearest whole number)On April 30,2020, ABC Corp. purchased bonds with a face value ofP1,400,000 and interest rate of 9% to be paid annually every Dec. 31until the end of 2024. It paid P1,360,000 plus accrued interest plustransaction fee of P10,000. What is the journal entry to record thepurchase if ABC accounted it as a FA‐FV‐PL? Use Accrued InterestReceivable in your answer. Provide the total cash outflow relating to theacquisition.
- On January 1, 2024, an investor paid $299,000 for bonds with a face amount of $360,000. The contract rate of interest is 8% while the current market rate of interest is 10%. Using the effective interest method, how much interest income is recognized by the investor in 2025 (assume annual interest payments and amortization)? rev: 02_26_2021_QC_CS-252921• $30,010.• $30,160.• $29,900.• $28,204.On July 1, 2019, YYY Company paid P1,198,000 of 10% 20-year bonds with a face amount of P1,000,000. Interest is paid on June 30 and December 31. The bonds were purchased to yield 8%. The effective interest method is used to recognize interest income from this long-term investment. What is the carrying amount of the investment in bonds on December 31, 2019?Queen Energy Inc. issued bonds on January 1, 2023, that pay interest semiannually on June 30 and December 31. The par value of the bonds is $290,000, the annual contract rate is 6%, and the bonds mature in 10 years. (Use TABLE 14A.1 and TABLE 14A.2.) (Use appropriate factor(s) from the tables provided.) Required: a. For each of these three situations, determine the issue price of the bonds. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) b. For each of these three situations, prepare the journal entry that would record the issuance, assuming the market interest rate at the date of issuance was (1) 4%, (2)6%, (3)8%. (Use PV tables in determining the issue price of the bonds. Do not round intermediate calculations. Round the final answers to the nearest whole dollar.)