14. On July 1, Year 2, York Co. purchas bonds for SOA car 2, York Co. purchased as a long-term investment $1 million of Park, Inc.'s 8% s for $946,000, including accrued interest of $40,000. The bonds were purchased to yield 10% interest. The bonds mature on January 1, St. The bonds mature on January 1, Year 8, and pay interest annually on January 1. York uses the effective interest method of amortization. In its December 31, Year 2, balance sheet, what amount should York report as investment in bonds? Determine the amortized cost. No clear classification information is given and no fair value information is b. $916,600 provided. Use amortized cost when FV information is not available. c. $953,300 Interest receivable Interest revenue Dist. Amortization d. $960,600 $906.000 Dec. 31 Year 2 15. On July 1, Year 1, Cody Co. paid $1,198,000 for 10%. 20-year bonds with a face amount of Si million. Interest is paid on December 31 and June 30. The bonds were purchased to yield 8%. Cody uses the effective interest rate method to recognize interest income from this investment. The bonds are property classified as held-to-maturity. What should be reported as the carrying amount of the bonds in Cody's December 31, Year 1, balance sheet? a. $1,207,900 Determine the amortized cost. b. $1,198,000 Interest received Interest revenue c. $1,195,920 d. $1,193,050 I S 1198.000 L-ortization 16. On July 1. Year 1. Pell Co, purchased Green Corp. 10-year, 8% bonds with a face amount of $500,000 for $420,000. The bonds mature on June 30, Year 9, and pay interest semiannually on June 30 and December 31. Using the interest method, Pell recorded bond discount amortization of $1,800 for the 6 months ended December 31, Year 1. From this held-to-maturity investment, Pell should report Year 1 reyenue of a. $16.800 Determine the amortized cost. b. $18,200 Interest received Interest revenue Disc Amortization c. $20,000 1 $520.000 Dec. 31. Year! 17. On January 1, Welling Company purchased 100 of the $1,000 face value, 8%, 10-year bonds of Mann, Inc. The bonds mature on January 1 in 10 years, and pay interest annually on January 1. Welling purchased the bonds to yield 10% interest. How much did Welling pay for the bonds? a. $87,707 b. $92,230 c. $95,477 d. $100,000 18. An investor purchased a bond classified as a long-term investment between interest dates at a discount. At the purchase date, the carrying amount of the bond is more than the Cash Paid to seller Face Amount of bond No Yes No No Yes No Yes Yes
