User Account

All Pages

How much interest revenue would be reported for the year

Assignment Help Accounting Basics
Reference no: EM133050046

Question - Was struggling with this question, if anyone could walk me through this , would be appreciated. Amortized cost method - Bond investment: On July 1 20X8, Sun company purchased $4,000,000 of Moon corp. 6.2% bonds, classified as an AC investment. The bonds pay semi-annual interest each 30 June and 31 December. The market interest rate was 6% on the date of purchase. The bonds mature on 30 June 20X13.

Required -

1. Calculate the price paid by Sun Company.

2. Construct a table that shows interest revenue reported by Sun, and the carrying value of the investment, for each interest period for four interest periods. Use the effective-interest method.

3. Give entries for the first two interest periods based on your calculations in requirement 2.

4. How much interest revenue would be reported for the year ended 31 December 20X9? What would the balance of the investment account be at this time?

Reference no: EM133050046

Questions Cloud

What is the current gdp growth rate : To learn about the GDP in the real world and to answer the questions, follow the steps below to obtain data from the Bureau of Economic Analysis.
Different theories and models in leadership : Critically examine their own emotional reactions to the stresses presented by entrepreneurial challenges with enhanced insight.
Hackers break into systems and disrupt web site services : Discuss are they criminals, or are they challenging computer specialists discover faults within computer networks and systems?
Global business environment : What do you recommend that Warp 8 do to address these issues and to thrive in the Global business environment? Justify and explain any actions
How much interest revenue would be reported for the year : How much interest revenue would be reported for the year ended 31 December 20X9? What would the balance of the investment account be at this time
Organization project management methodology : Discuss the PMBOK® Guide and how it may relate to an organization's project management methodology.
Barriers to innovation that a leader faces : Problem: Discuss at least three (3) different challenges or barriers to innovation that a leader faces within teams and organisations and identify ways (4 minim
What is the price of the car today : A car can be purchased for $2000 down payment [Now] + $450 per month for 4 years. What is the price of the car today
Describe intellectual property protection : Create a process map to describe intellectual property protection within the context of the creation a new product or service relevant to your field of study.

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