User Account

All Pages

Prepare the journal entries for the receipt of interest

Assignment Help Accounting Basics
Reference no: EM132796561

Question - Simpson Ltd. purchased 8%, $ 100,000 (par value) bonds for $ 108,530 on January 1, 2020. The bonds were purchased to yield 6%. Interest is paid on July 1 and January 1 and the bonds mature on January 1, 2025. Simpson uses the amortized cost method and the effective-interest method to amortize the premium. Simpson has a year end of December 31 and follows ASPE.

Required -

a) Prepare the journal entry to record the purchase.

b) Prepare the journal entries for the receipt of interest and amortization of the premium for July 1 and December 31, 2020. Round all values to the nearest dollar.

c) To the nearest dollar, what is the carrying value of the investment at the end of 2021?

Reference no: EM132796561

Questions Cloud

Describe the expected values and signs of the coefficients : The risk-free rate of return is 2%. Describe the expected values and signs of the coefficients ?0, ?1 and ?2 to support the standard finance CAPM model.
How to make a strategy so that the business coñtinues : How to make a strategy so that the business coñtinues to run well and keep customers.
Discuss about the network segmentation : The storage solution should have redundant network access paths. These paths should be no less than 1GB per second and support network segmentation.
Type of controlling mechanisms : What the preferred choice when other type of controlling mechanisms are unfeasible or too costly?
Prepare the journal entries for the receipt of interest : Prepare the journal entries for the receipt of interest and amortization of the premium for July 1 and December 31, 2020. Round all values to the nearest dollar
Significant involvement from the employees for execution : In an organization setting, what communication channel would you choose to communicate in the following scenarios:
What is the internal rate of return of the neptune ltd : What is the internal rate of return of the Neptune Ltd. investment? Neptune Ltd. wants to expand its operations by manufacturing a new product line.
Describe the physical protection of database : Topic selected: Physical Protection of Database. The topic must be appropriate for graduate level. Find a topic that we covered in the course and dig deeper
How much would you pay or receive in total : How much would you pay/receive in total if you obtained a position in each of the components of a bullish European call spread

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