A $500,000 bond issue on which there is an unamortized discount of $20,000 is redeemed for $475,000. Journalize the redemption of the bonds.

HINT: You paid cash totaling $475,000 to buy-back all of the outstanding Bonds, which is your liability Bonds Payable

Given the following data, prepare an amortization schedule (use the straight line method)

1/1/10 - issued $800,000, 9%, 3 year bonds, interest paid annually on 12/31 to yield 8% Use the following format (round to nearest dollar, may have small rounding difference);

HINT: 800,000 X 9% is TOTAL ANNUAL INTEREST PAYMENT Date Cash paid Int. expense Amortization Bond carry value 1/1/10 820,615 12/31/10 12/31/11 12/31/12

Other short answers:

1) Discuss factors contributing to the trend to fair value accounting. 2) What are some of the disadvantages associated with using fair value?

3) Discuss the similarities and differences in reporting trading securities, available-for-sale securities and held-to-maturity securities.