User Account

All Pages

Prepare the adjusting journal entry at december

Assignment Help Financial Accounting
Reference no: EM13872121

Purpose: This exercise will give an example of using the fair value option for reporting a long-term note payable.

On April 1, 2014, Halbmann Company issued a long-term note payable for cash. The note had a face value of $200,000 and a stated interest rate of 8%. The market rate of interest was also 8% on April 1. Interest is paid at the end of each month.

Halbmann chooses to use the fair value option for this note. At December 31, 2014, the fair value of the bonds was $185,000 because interest rates in the market place had increased. At December 31, 2015, the fair value of the bonds was $202,000 because the market rate of interest for this type of note had decreased.

Instructions:

a. Prepare the adjusting journal entry at December 31, 2014 required to report the note payable at fair value.

b. Indicate the amounts to be reported on the balance sheet at the end of 2014 and the income statement for 2014 that relate to this note payable.

c. Prepare the adjusting journal entry at December 31, 2015 required to reflect the note payable at fair value.

d. Indicate the amounts to be reported on the balance sheet at the end of 2015 and the income statement for 2015 that relate to this note payable.

Reference no: EM13872121

Questions Cloud

How graphics will be used in the site : how graphics will be used in the site
Should the u.s. convert to a zero personal income tax : Analyze the way in which the two (2) countries that you have researched provide services and benefits to its citizens without collecting personal income taxes.
Determining the volume of the anchor : An iron anchor of density 7870 kg/m3 appears 200 N lighter in water than in air.
Discuss how issues presented in this learning module : Discuss how issues presented in this learning module apply to the case in question. Your research should be documented by citing at least five credible sources such as a newspaper, a biographic article, book, or website.
Prepare the adjusting journal entry at december : Prepare the adjusting journal entry at December 31, 2014 required to report the note payable at fair value. Prepare the adjusting journal entry at December 31, 2015 required to reflect the note payable at fair value.
Problem regarding the downward force : If the pressure inside is 1.0 atm, what downward force must the crew exert on the hatch to open it?
Define the term security : Define the term security and list (and discuss in detail) the five main security measures.Give some data in healthcare management
Maximizing investor losses : Discuss the purpose for each, and suggest as least two (2) tax-planning strategies for ensuring that the IRS allows passive losses in order to reduce your tax liability
Question regarding the bernoulli effect : If the wings have surface area of 1200m2, how fast must the air flow over the upper surface of the wing if the plane is to stay in the air? Consider only the Bernoulli effect.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Purchase qualified replacement property

On November 18, 2014, equipment is stolen from ABC manufacturing. ABC purchased the equipment for $100,000 and its adjusted basis is $0. The insurance company paid ABC $20,000 for its loss on January 6, 2015. How long does ABC have to purchase qualif..

  Zero coupon bond

Zero Coupon Bonds [LO2] Suppose your company needs to raise $ 45 million and you want to issue 30- year bonds for this purpose. Assume the required return on your bond issue will be 6 percent, and you're evaluating two issue alternatives: a 6 percent..

  Determine total cost allocation

Determine the total cost allocation and departmental overhead rate for the producing departments using the direct method. Show your work.

  About the bond investment transactions

Journalize the entries to record the following selected bond investment transactions for Supper Club Trust: For a compound transaction, if an amount box does not require an entry, leave it blank.

  Explain the generally accepted accounting principles

Explain what accountants are generally referring to when they talk about financial reporting and explain the generally accepted accounting principles (GAAP).

  Purpose a merchandise purchases budget

Purpose a merchandise purchases budget showing how many units should be purchased for each of the months April, May, and June.

  Off-balance sheet financing and variable interest entity

A variable interest entity (VIE) is a structure frequently used for off-balance sheet financing. VIEs have become quite numerous in recent years and have been the subject of some controversy. Briefly explain what meat by 0ff-balance sheet financing i..

  Vantage services issued

On March 1, 2015, Vantage Services issued a 5% long-term notes payable for $15,000. It is payable over a 3-year term in $5,000 annual principal payments on March 1 of each year plus interest, beginning March 1, 2016. Each yearly instalment will inclu..

  Journal entries of merchandise purchase on account1 3302009

journal entries of merchandise purchase on account.1. 3302009 sold 1700000 merchandise inventory on account.nbsp all

  Advantage of classifying it as an operating cash flow

What advantages do you see for classifying interest expense as an investing cash flow rather than an operating cash flow? What is the advantage of classifying it as an operating cash flow? What is the advantage of classifying it as a financing ca..

  Define inherent risk and residual risk

Identify the population from which you should select a sample to test control and Define inherent risk and residual risk.

  What costs are relevant for each of the following purposes

Department 7 of the Arbia Company manufactures a variety of components for products, one of which is Part No. 211. Data on this part are as follows.

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