What amount of holding gain should defrost recognize

Assignment Help Accounting Basics

Reference no: EM132783477

Problem 1: On Dec. 4, 20x1, Defrost Co. purchased P200,000 bonds at gg Defrost incurred P20,000 transaction costs in the acquisition The bonds mature on Jan. 1, 20x5 and pay annual interest at 12%. The bonds were acquired as part of a portfolio investments that are managed together for short-term profit taking. The bonds were quoted at 101 on Dec. 31, 20x1. Defrost sold the bonds at 110 on Jan. 12, 20x2. At what amount should Defrost report the bonds in its 20x1 financial statements, what amount of holding gain (loss) should Defrost recognize in 20x1, and what amount of gain (loss) should Defrost recognize from the sale on Jan. 12, 20x2?

a. 202,000; 6,000; 18,000

b. 196,000; 0; 24,000

c. 216,000; 0; 4,000

d. 202,000; (14,000); 18,000

Reference no: EM132783477

Questions Cloud

What do think of the new sales promotion used by good-deal : Prepare a note amortization schedule for these new payments for the next 2 years. What do you think of the new sales promotion used by Good-Deal

Describe joseph stalins rise to total power in the ussr : Describe Joseph Stalin's rise to total power in the USSR and how his paranoia and desire for total control led to the terrible purges of the 1930s.

Determine the present value on 31 december : Using the appropriate annuity formula and assuming 12% annual interest rate, determine the present value on 31 December, 2013, of a five-period annual annuity o

What is the yield to maturity of bond : Assume coupons are paid annually. Here are the prices of three bonds with 10-year maturities. Assume face value is $100.

What amount of holding gain should defrost recognize : What amount of holding gain (loss) should Defrost recognize in 20x1, and what amount of gain (loss) should Defrost recognize from the sale on Jan. 12, 20x2?

Discuss the influence of cultural aspects of the movement : This unit introduces three religious-based reform movements: Protestantism in mainland Europe, Protestantism in England, and the Catholic Counter-Reformation.

Explain why a straddle is not necessarily a good strategy : Explain why a straddle is not necessarily a good strategy when the underlying event is well known to everyone.

What is harper expected return : A stock has a 40% chance of producing a 30% return, a 30% chance of producing a 10% return, and a 30% chance of producing a -20% return.

What do think is the purpose of presenting accumulated : What do think is the purpose of presenting accumulated depreciation in the balance sheet? how are you going to differentiate it to depreciation expense

User Account

All Pages