On January 2, 2011, a company invests in the following corporate debt securities, classified as held to maturity per ASC Topic 320 1 5 year $1,000,000 face value corporate bond paying 6 percent interest annually on December 31 The bond is priced to yield 5 percent to maturity 2 4 year $500,000 face...

a Bond 1 pays 60000 per year in interest and 1000000 at maturity Cash flow Present value calculation ...

On January 2, 2011, a company invests in the following corporate debt securities, classified as held-to-maturity per

Question:

On January 2, 2011, a company invests in the following corporate debt securities, classified as held-to-maturity per ASC Topic 320:
1. 5-year $1,000,000 corporate bond paying 6 percent interest annually on December 31. The bond is priced to yield 5 percent to maturity.
2. 4-year $500,000 corporate bond paying 4 percent interest annually on December 31. The bond is priced to yield 5 percent to maturity.
Required
a. Calculate the cost of each investment.
b. Calculate interest income for 2011 and 2012.
c. At what value are these investments reported on the company's December 31,2013, balance sheet?
d. On December 31, 2014, the company determines that an impairment loss should be reported on the $1,000,000 bond. What factors indicate impairment loss? If the bond is estimated to have a value of $500,000 on December 31, 2014, what is the amount of the impairment loss, and where will it be reported on the 2014 financial statements? Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...