Written Assignment Page 2

Written Assignment Page 2 - P12-03 1 Investment in bonds...

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Unformatted text preview: P12-03 1 Investment in bonds (face amount)...................................$80,000,000 Discount on bond investment (difference)............................................$14,000,000 Cash (price of bonds)............................................................................$66,000,000 2 Cash (4% x $80,000,000)..................................................$3,200,000 Discount on bond investment (difference)............................................$100,000 Interest revenue (5% x $66,000,000)....................................................$3,300,000 3 Cash (4% x $80,000,000)..................................................$3,200,000 Discount on bond investment (difference)............................................$110,000 Interest revenue ([5% x $66,000,000] + $100,000)..............................$3,310,000 4 The 2009 balance sheet would report the investments at the fair value of $70,000,000. The unrealized holding gain o 5 The affects on the statement of cash flows would be: Operating cash flows: Cash inflow from interest = $6,400,000 Investing cash flows: Cash outflow from purchasing investments = $66,000,000 Page 1 P12-03 in sharholder's equity. Page 2 ...
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This note was uploaded on 09/12/2011 for the course ACC 202 taught by Professor Lavey during the Spring '11 term at Edison State College.

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Written Assignment Page 2 - P12-03 1 Investment in bonds...

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