Reference no: EM133077893

Questions -

Q1. Patton Company purchased $400,000 of 10% bonds of Scott Co. on January 1, 2022, paying $376,100. The bonds mature January 1, 2032; interest is payable each July 1 and January 1. The discount of $23,900 provides an effective yield of 11%. Patton Company uses the effective-interest method and holds these bonds for collection. For the year ended December 31, 2022, Patton Company should report interest revenue from the Scott Co. bonds of:

Q2. Patton Company purchased €400,000 of 10% bonds of Scott Co. on January 1, 2022, paying €376,100. The bonds mature January 1, 2032; interest is payable each July 1 and January 1. The discount of €23,900 provides an effective yield of 11%. Patton Company uses the effective-interest method and holds these bonds for collection. Which of the following is the correct journal entries to record interest revenue on July 1, 2022?

Q3. Blue Sky Company's 12/31/24 statement of financial position reports assets of $5,000,000 and liabilities of $2,000,000. All of Blue Sky's assets' book values approximate their fair value, except for land, which has a fair value that is $300,000 greater than its book value. On 12/31/24, Horace Wimp Corporation paid $5,400,000 to acquire Blue Sky. What amount of goodwill should Horace Wimp record as a result of this purchase?