cheetsheet - (1) Bond Transactions stm Purchased...

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(1) Bond Transactions * Unr.gain T_S is rprtd = Other incm of inom stm Purchased ( $40000,10%, AI-320 ) * Unr.gain A_ F_S is rprtd = Stkhldrs eqty bal sht Dr Invst 40000 FV ACC DISADV Dr Int Rec 320 1. FV may not be obtainable for come ASS & LIAB. Cr Csh 40320 Ex: Property,Plant, Intang assets-goodwill. Received the 1st semiannl int. 2. FV make it more difficult to compare comp if Dr Csh(40000*.1*.5) 2000 comp use diff mtds of determining FV. Cr Int.rec 320 3. Using FV could result in more Cr Int.Rev 1680 BOND INVST AMRTZN AFECTS INVST Sold $30000 of the bonds at 102 PRM AMRT : Dr Int.rev XXX +AI-110 Cr Invst XXX Dr Cash 30600 = Sale Prcd DISC AMRT : Dr Invst XXX Cr Gain 600 Cr Int Rev XXX Cr Int.rev 110 Input: ( FA = 50000 (-)DISC = -6000) = PRC Cr Invst 30000 Purchase : Apr 1 : Dr INVST 44000 BOND REDMPTION Cr CASH 44000 RDM BP $500000 Rcpt Semi ann int: Oct 1 Dr Csh (50000* 8%*.5) 2000 UNAMRTDISC 40000, redm 475000 Cr Int rev 2000 Dr BP 500000 Adjusting entry for 3 mnth of accd int on Dec 31 Dr Loss on Red.Bnds 15000 Dr Int rec (50000 * 8% * ¼) 1000 Cr Disc on BP 40000 Cr Int Rev 1000 Cr Cash $475000 Entry for AMORT of disc on Dec 31 using SLM CA = BP - UNAMTDISc Dr Invst (6000/120 mnth) *9mnth $450 CA = BP+UNAMTPRM Cr Int rev $450 If REDEMPrc < CA Gain Receipt of the FA of the bonds Oprtg Act: affects NetInc Apr 1: Dr Csh 50000 Purchase and sale of merchandise Cr Invst 50000 Investing Act: affects noncurr ass of the company Land trans Inv activity SOCF CI = selling fxd ass, invests, intang ass.
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cheetsheet - (1) Bond Transactions stm Purchased...

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