Su06Ch17_Solutions

Su06Ch17_Solutions - Chapter 17: Investments Homework...

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Chapter 17: Investments Homework Solutions 1 EXERCISE 17-3 (15-20 minutes) (a) January 1, 2003 Held-to-Maturity Securities. ............................................................... 322,744.44 Cash . ......................................................................................... 322,744.44 (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 1/1/03 $322,744.44 12/31/03 $36,000 $32,274.44 $3,725.56 319,018.88 12/31/04 36,000 31,901.89 4,098.11 314,920.77 12/31/05 36,000 31,492.08 4,507.92 310,412.85 12/31/06 36,000 31,041.29 4,958.71 305,454.14 12/31/07 36,000 30,545.86 * 5,454.14* 300,000.00 *Rounded by 45¢. (c) December 31, 2003 Cash ............................................................................... 36,000 Held-to-Maturity Securities. ................................................... 3,725.56 Interest Revenue . ..................................................................... 32,274.44 (d) December 31, 2004 Cash ............................................................................... 36,000 Held-to-Maturity Securities. ................................................... 4,098.11 Interest Revenue . ..................................................................... 31,901.89 EXERCISE 17-4 (10-15 minutes) (a) January 1, 2003 Available-for-Sale Securities. .............................................................. 322,744.44 Cash . ......................................................................................... 322,744.44 (b) December 31, 2003 Cash . ....................................................................................... 36,000 Available-for-Sale Securities. .................................................. 3,725.56 Interest Revenue . ..................................................................... 32,744.44 Securities Fair Value Adjustment— Available-for-Sale. ....................................................................................... 1,481.12 Unrealized Holding Gain or Loss— Equity ($320,500.00 – $319,018.88) . ............................................... 1,481.12 (c) December 31, 2004 Unrealized Holding Gain or Loss—Equity . .............................................................. 7,401.89 Securities Fair Value Adjustment— Available-for-Sale. ........................................................................... 7,401.89
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Chapter 17: Investments Homework Solutions 2 EXERCISE 17-4 (Continued) Cost Fair Value Unrealized Holding Gain (Loss) Available-for-sale bonds 314,920.77 309,000.00 $(5,920.77) Previous securities fair value adjustment—Dr. 1,481.12
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This homework help was uploaded on 04/06/2008 for the course ACC 302 taught by Professor Ahaha during the Spring '07 term at Central Mich..

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Su06Ch17_Solutions - Chapter 17: Investments Homework...

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