User Account

All Pages

Compute the amount of interest revenue earned

Assignment Help Accounting Basics
Reference no: EM132601434

Question - Bonobo's Balloons Inc. purchased the $60,000 par value bonds of Gnomes R Us on January 1, 2020. The coupon rate is 8% and the bonds mature in 5years. The market rate of interest is 12%. The bonds pay interest semi-annually every June 30 and December 31. The bonds were purchased for $51,167.90 and were classified as available-for-sale.Bonobo's Balloons uses the effective-interest rate method to amortize bond discounts and premiums.At December 31, 2020, the market value of the bonds was $65,000. Bonobo's Balloons sold the bonds on January 1, 2021, for $65,000.

Instructions -

1. Compute the carrying value of the investment at December 31, 2020.

2. Compute the amount of interest revenue earned on this investment at June 30, 2020.

Reference no: EM132601434

Questions Cloud

How would this have affected the amount of unrealized gain : How would this have affected the amount of unrealized gain or loss on December 31, 2020, and how would this have affected its reporting
What are similarities and differences in leadership : What are the similarities and differences in the leadership styles of a business executive and a police chief?
Compute the amount of gain or loss recognized on the sale : Compute the amount of gain or loss recognized on the sale of the investment at January 1, 2021. In which financial statement should this amount be reported
How much will be book value of machine on January : The Corporation decided to use the sum of the year's digit method of depreciation beginning January 1, 2020. How much will be book value of machine on January
Compute the amount of interest revenue earned : The coupon rate is 8% and the bonds mature in 5years. The market rate of interest is 12%. Compute the amount of interest revenue earned
Analyze the qualifications of good attorney : Analyze the qualifications of a good attorney. Discuss how the judge, jury, and attorneys interact with each other.
How much loss on sale of land should be recorded on December : On December 31, 2019, the land was sold for P3,650,000. How much loss on sale of land should be recorded on December 31, 2019
Law enforcement officers and crime scene technicians : Law enforcement officers and crime scene technicians must use caution and protect themselves at all times from contracting AIDS or hepatitis
What is the best process of managing money : What is the best process of managing money and reconciling accounts? Are there any risks a personal account and a business account face

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd