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510 Handout 3 Concepts - How would you change those numbers...

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ACCY 510, Financial Reporting Standards Department of Accountancy, Fall 2011 In-class Handout #3 Exercise 3.1 Back to the bond contracts we studied last time. What financial information pertaining to these contracts would you like a corporation to report? To whom? Why? How would the numbers you want reported change from period to period? What would they look like a) at the beginning of the contract b) just before a coupon payment c) just after a coupon payment d) at the year end e) at the end of the life of the contract How would you record the numbers at point (a) above?
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Unformatted text preview: How would you change those numbers at point (b) above? What would you do at point (c)? Points (d) and (e)? Exercise 3.2 Based on your answers above, or on your insights and intuitions from prior experiences, what financial reports would be necessary to provide financial statement users with a satisfactory understanding of the activities of the issuing and buying firms with respect to the bond contract? What information would each report provide that the others do not?...
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