Hanson Incorporated issued $1 million of 7%, 10-year bonds on July 1, 2019, at face value. Interest
Question:
Hanson Incorporated issued $1 million of 7%, 10-year bonds on July 1, 2019, at face value. Interest is payable each December 31. The company has chosen to apply the fair value option in accounting for the bonds. A risk assessment at December 31, 2020, shows that Hanson's credit risk has increased, and as a result of the increased credit risk, the fair value of the bonds is $900,000 on that date. Prepare the company's journal entries on December 31, 2020, if Hanson follows
(a) ASPE,
(b) IFRS 9.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
a Interest Expense 1000000 X 7 70000 Cash 70000 To ...View the full answer
Answered By
Irfan Ali
I have a first class Accounting and Finance degree from a top university in the World. With 5+ years experience which spans mainly from the not for profit sector, I also have vast experience in preparing a full set of accounts for start-ups and small and medium-sized businesses. My name is Irfan Ali and I am seeking a wide range of opportunities ranging from bookkeeping, tax planning, business analysis, Content Writing, Statistic, Research Writing, financial accounting, and reporting.
249+ Reviews
530+ Question Solved
Related Book For 
Intermediate Accounting Volume 2
ISBN: 9781119497042
12th Canadian Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
Question Posted:
