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3-22-11 Solutions

3-22-11 Solutions - EXERCISE 17-1(a 1(b 2(c 1(d 2(e 3(f 2...

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EXERCISE 17-1 (a) 1 (b) 2 (c) 1 (d) 2 (e) 3 (f) 2 EXERCISE 17-2 (a) January 1, 2010 Held-to-Maturity Securities ............................................. 300,000 Cash ......................................................................... 300,000 (b) December 31, 2010 Cash .................................................................................. 30,000 Interest Revenue ..................................................... 30,000 (c) December 31, 2011 Cash .................................................................................. 30,000 Interest Revenue ..................................................... 30,000 EXERCISE 17-3 (a) January 1, 2009 Held-to-Maturity Securities ............................................. 537,907.40 Cash ......................................................................... 537,907.40 (b) Schedule of Interest Revenue and Bond Premium Amortization Effective-Interest Method 12% Bonds Sold to Yield 10% Date Cash Received Interest Revenue Premium Amortized Carrying Amount of Bonds 1/1/09 $537,907.40 12/31/09 $60,000 $53,790.74 $6,209.26 531,698.14 12/31/10 60,000 53,169.81 6,830.19 524,867.95 12/31/11 60,000 52,486.80 7,513.20 517,354.75 12/31/12 60,000 51,735.48 8,264.52 509,090.23 12/31/13 60,000 50,909.77* * 9,090.23 500,000.00 *Rounded by 75¢. 1
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EXERCISE 17-3 (Continued) (c) December 31, 2009 Cash ..................................................................................... 60,000 Held-to-Maturity Securities ....................................... 6,209.26 Interest Revenue ........................................................ 53,790.74 (d) December 31, 2010 Cash ..................................................................................... 60,000 Held-to-Maturity Securities ....................................... 6,830.19 Interest Revenue ........................................................ 53,169.8 EXERCISE 17-6 (a) Securities Fair Value Adjustment (Trading) ................................................................................ 3,000 Unrealized Holding Gain or Loss— Income .......................................................................... 3,000 (b) Securities Fair Value Adjustment (Available-for-Sale) .............................................................. 3,000 Unrealized Holding Gain or Loss— Equity ........................................................................... 3,000 (c) The Unrealized Holding Gain or Loss—Income account is reported in the income statement under Other Revenues and Gains. The Unrealized Holding
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