Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

6 22 Sints Federal Semiconductors issued 12% bonds, dated January 1, with a face amount of $790 million on January 1, 2021. The bonds sold

image text in transcribed
6 22 Sints Federal Semiconductors issued 12% bonds, dated January 1, with a face amount of $790 million on January 1, 2021. The bonds sold for $73425,169 and mature on December 31, 2040 (20 years). For bonds of similar risk and maturity the market yield was 13%. Interest is paid semiannually on June 30 and December 31 Federal determines interest at the effective rate Federal elected the option to report these bonds at their fair value On December 31, 2021, the fair value of the bonds was $720 million as determined by their market value in the over the counter market. Assume the fair value of the bonds on December 31, 2022 had risen to $726 million Required: Complete the below table to record the following journal entries 1. & 2. Prepare the journal entries to adjust the bonds to their fair value for presentation in the December 31, 2021, balance sheet, and adjust the bonds to their fair value for presentation in the December 31, 2022, balance sheet. Federal determined that none of the change in fair value in 2021 was due to a decline in general interest rates and one half of the increase in fair value in 2022 was due to a decline in general interest rates. eBook Hit Complete this question by entering your answers in the tabs below. Calculation General Journal Complete the below table to determine the amounts for the journal entries. (Negative amount should be indicated by a minus sign. Round final answers to the nearest whole dollars.) Cash Interest Bond Interest Paid Expense Increase in Balance Carrying Value Fair Value Unrealized Holding Gain (los) $734,125,160 Semiannua Interest Period-End 01/012021 06/30/2021 12/31/2021 06/302022 1231/2002 $ 720.000.000 $726.000.000 Fiir Value Adjustment 01/01/2021 06/30/2021 12/31/2021 Bonds Payable 734,125,169 01/01/2021 06/30/2021 12312021 0630/2022 12/31/2022 00302022 12312022

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting

Authors: Carl s. warren, James m. reeve, Philip e. fess

21st Edition

978-0324400205, 324225016, 324188005, 324400209, 9780324225013, 978-0324188004

More Books

Students also viewed these Accounting questions

Question

1. What is nonverbal communication?

Answered: 1 week ago