What is the unrealized holding gain loss

Reference no: EM132823799

Question - ABC Corp acquired a three-year, 12% bonds with a face value of 1,000,000 on January 1, 2019. The bonds which pay annual interest every December 31 had a 10% prevailing interest rate on the date of acquisition. The investment was appropriately classified as Available for Sale Security. The present value factor of 1 at 10%, ordinary annuity, for 3 periods is at 2.486852 while the present value factor of 1 at 10% for 3 periods is at 0.751315.

On December 31, 2019, the prevailing interest for similar securities is at 11%, thus the fair market value of the bonds is at 1,017,125.

On March 31, 2020, the bonds were sold at 1,250,000.

REQUIRED -

1. What is the unrealized holding gain loss to be recognized in the balance sheet as of December 31, 2019?

2. What is the correct interest income to be reported in the 2019 income statement?

3. How much is the correct realized gain or loss on sale of the investment in 2020?

Reference no: EM132823799

Questions Cloud

What is the expected cash-flow per share : Assuming the price of ABC Company increases to 160 per share one year from now, what is the expected cash-flow per share for an investor who owns

Evaluating program conditions for professional development : Evaluating Program Conditions for Professional Development. For teacher inquiry, reflection, and growth to be successful, early childhood programs must support.

What the greatest impact on logistics will be : What the greatest impact on Logistics will be? The program office for a Navy shipboard communications system early in the TMRR phase

Post a reflection on which strategies were effective : Post a reflection on which strategies were effective and which were ineffective in the effort to provide social justice and equity for all students.

What is the unrealized holding gain loss : On March 31, 2020, the bonds were sold at 1,250,000. What is the unrealized holding gain loss to be recognized in the balance sheet as of December 31, 2019

What is the public opinion of living wage : What is the public's opinion of living wage? Consider the general population and companies

What thing is excluded from cost bookkeeping : An aggregate of the multitude of direct expenses known as? Toy fabricating organizations use what kind of costing? What thing is excluded from cost bookkeeping

How to develop a career goal using given information : Developing a career goal is a great way to take charge of planning your career and a useful tool to manage your career effectively. Many individuals may not.

What are the advantages of performance appraisals : What are the advantages of performance appraisals and how they contribute to effective training and development

User Account

All Pages