By how much will Appling comprehensive income be increased

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Reference no: EM132921031

Question - Appling Enterprises issued 8% bonds with a face amount of $520,000 on January 1, 2021. The bonds sold for $472,156 and mature in 2040 (20 years). For bonds of similar risk and maturity the market yield was 9%. Interest is paid semiannually on June 30 and December 31. Appling determines interest expense at the effective rate. Appling elected the option to report these bonds at their fair value. The fair values of the bonds at the end of each quarter during 2021 as determined by their market values in the over-the-counter market were the following:

March 31 $500,000

June 30 485,000

September 30 481,000

December 31 488,000

General (risk-free) interest rates did not change during 2021.

Required -

1. By how much will Appling's comprehensive income be increased or decreased by the bonds (ignoring taxes) in the March 31 quarterly financial statements?

2. By how much will Appling's comprehensive income be increased or decreased by the bonds (ignoring taxes) in the June 30 quarterly financial statements?

3. By how much will Appling's comprehensive income be increased or decreased by the bonds (ignoring taxes) in the September 30 quarterly financial statements?

4. By how much will Appling's comprehensive income be increased or decreased by the bonds (ignoring taxes) in the December 31 annual financial statements?

Reference no: EM132921031

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