Reference no: EM133187029
Question - Bond Investment at Amortized Cost and FV-NI Hitt Company purchased bonds to e accounted for under the amortized cost model
Face value $100,000
Coupon interest rate 7%
Yield rate 10%
Purchase date January 1, 20X1
Maturity date January 1, 20X4
Interest receipts due Annually on January 1
Method of amortization Effective interest
Purchase price $92,539.95
Fair value at December 31, 20X1 $96,000
Required -
a) Calculate the amount of purchase premium or discount.
b) Prepare the journal entry to record purchase of the bonds.
c) Prepare the bond amortization schedule.
d) Prepare all journal entries relat4ed to these bonds (after purchase) for 20X1 and 20X2. Assume the accounting period coincides with the calendar year and reversing entries are not used.
e) Prepare the journal entry to record the sale of the bonds on January 1, 20X3 for $102,000. Assume the sale occurs immediately after the annual interest receipt.
f) Assume that Hitt Company follows ASPE and accounts for the bonds under FV-NI model. Prepare the journal entries related to this bond for 20X1.
g) Assume that Hitt Company follows IFRS and accounts for the bonds under FV-NI model. Prepare the journal entries related to this bond for 20X1.
|
Analyse organisational analysis and capabilities
: Select a specific company as example on analysing its internal business environment and breifly respond to the following:
|
|
Calculate the real worth of the investment in today dollars
: The relevant nominal discount rate is 7.5% and the inflation rate is 4.2%. Calculate the real worth of the investment in today's dollars
|
|
Calculate the labor rate and the labor efficiency variance
: Calculate the labor rate variance and the labor efficiency variance. Indicate whether the variances are favorable or unfavorable
|
|
How much gain or loss would be recorded
: If the company sells the equipment for $42,000 on December 31, 2023, how much gain or loss would be recorded in the company's financial statements
|
|
Prepare the journal entries related to this bond
: Assume that Hitt Company follows IFRS and accounts for the bonds under FV-NI model. Prepare the journal entries related to this bond for 20X1
|
|
Design and build a small building in a local industrial park
: Design and build a small building in a local industrial park. The design team within the company has prepared a set of outline design drawings
|
|
Indicate the effects on assets and liabilities
: For each transaction described above, indicate the effects on assets, liabilities, and stockholders' equity using the format below
|
|
Collaborate in the production of construction information
: Develop construction drawings, details, schedules and specifications in support of a given construction project and Interpret different types of construction
|
|
What is the amount allocated to the work-in-process
: Work-in-process records revealed that 13,500 card units were started in January, 6,750 card units were complete, What is amount allocated to the work-in-process
|