Reference no: EM132546763
Question - On January 1, 2020, ABC Corp. acquired 8%, $ 100,000 (face value) bonds of DEF Ltd., to yield 9% for $95,517.20. The bonds were dated January 1, 2020, and mature on December 31, 2025, with interest payable each January 1. ABC intends to hold the bonds to maturity, and will use the FV-NI model and the effective-interest method of amortization of bond premium or discount. Assume that the fair market value of the bonds was equal to ABC's investment's book value in 2020, but in 2021, the fair market value of the bonds were $101,000 at the end of 2020.
Required - (Round all values to the nearest dollar.)
(1) Prepare an amortization schedule 'proving' the price that Penny paid for the bonds.
(2) Prepare the following entries in Penny's books:
a) Acquisition of bonds on January 1, 2020,
b) Year-end adjusting entry at December 31, 2020, and December 31, 2021.
c) Receipt of the first interest payment on January 1, 2021.
d) Any adjusting entry required at the end of 2020 in addition to the any journal entries recorded above.
|
Calculate transfer price if base on standard absorption cost
: Frame Division is 125 percent of direct labor cost. Calculate the transfer price if it is based on standard absorption cost plus a 10 percent markup.
|
|
Calculate the current value of the firm equity
: The Giant Machinery has the current capital structure of 65% equity and 35% debt. Its net income in the current year is $250,000. The company
|
|
ELEC 20009 Antenna Theory and Communication System
: ELEC 20009 Antenna Theory and Communication System Assignment Help and Solution, Middle East Countries - Assessment Writing Service
|
|
Total market value of the firm-western electric
: Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of return of 13.5%. The firm has 5,000 preference shares
|
|
Prepare an amortization schedule proving the price
: On January 1, 2020, ABC Corp. acquired 8%, $ 100,000 (face value) bonds of DEF Ltd., Prepare an amortization schedule proving the price
|
|
Make the necessary adjusting entries on december
: The value of office equipment was recorded at Rp176,200,000. Make the necessary adjusting entries on December 31, 2015
|
|
What is the pre-tax cost of the company debt
: What is the pre-tax cost of the company debt if weighted average costs of the company is 13.5% and the firm's tax rate is 35 percent?
|
|
Calculate zap return on sales
: Calculate Zap's Return on Sales, Investment Turnover and Return on Investment. Zap is a retailer that specialises in electrical goods.
|
|
Calculate the current price of the corporate bond
: Calculate the current price of the ordinary share if the average return of the shares in the same industry is 9%?
|