Week_7_homework

Week_7_homework - SOLUTIONS TO EXERCISES EXERCISE 17-1 (510...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
SOLUTIONS TO EXERCISES EXERCISE 17-1 (5–10 minutes) (a) 1 (b) 2 (c) 1 (d) 2 (e) 3 (f) 2 EXERCISE 17-2 (10–15 minutes) (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 17-5 (20–30 minutes)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
(a)Schedule of Interest Revenue and Bond Discount Amortization Straight-line Method 9% Bond Purchased to Yield 12% Date Cash Rece ived Interest Reven ue Bond Discount Amortizati on Carrying Amount of Bonds 1/1/10 $278,384 12/31/10 $27,00 0 $34,205 * $7,205* 285,589 12/31/11 27,000 34,205 7,205 292,794 12/31/12 27,000 34,206** 7,206 300,000 * *($300,000 – $278,384) ÷ 3 = $7,205 **Rounded by $1. (b)Schedule of Interest Revenue and Bond Discount Amortization Effective-Interest Method 9% Bond Purchased to Yield 12% Date Cash Rece ived Interest Reven ue Bond Discount Amortizati on Carrying Amount of Bonds 1/1/10 $278,384.00 12/31/10 $27,00 $33,406.0 $6,406.08 284,790.08
Background image of page 2
0 8* 12/31/11 27,000 34,174.8 1 7,174.81 291,964.89 12/31/12 27,000 35,035.11* * 8,035.11 300,000.00 * *$278,384 X .12 = $33,406.08 **Rounded by $.68. (c) December 31, 2011 Cash. .................................................................................... 27,000.00 Held-to-Maturity Securities. ............................................. 7,205.00 Interest Revenue. .............................................................. 34,205.00 (d)December 31, 2011 Cash. .................................................................................... 27,000.00 Held-to-Maturity Securities. ............................................. 7,174.81 Interest Revenue. .............................................................. 34,174.81 EXERCISE 17-6 (10–15 minutes)
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
(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 Gain or Loss—Equity account is reported as a part of other comprehensive income and as a component of stockholders’ equity until realized. The Securities Fair Value Adjustment account is added to the
Background image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 18

Week_7_homework - SOLUTIONS TO EXERCISES EXERCISE 17-1 (510...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online