Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

dt Pina Company commonly issues long-term notes payable to its various lenders. Pina has had a effective borrowing rate is quite low (less than 8%

image text in transcribed
image text in transcribed
image text in transcribed
dt Pina Company commonly issues long-term notes payable to its various lenders. Pina has had a effective borrowing rate is quite low (less than 8% on an annual basis). Pina has elected to use the fair value option for the long-term notes issued to Barclay's Bank and has the following data related to the carrying and fair value for these notes. Any changes in fair value are due to changes in market rates, not credit risk. December 31, 2020 December 31, 2021 December 31, 2022 Carrying Value $50,400 41,500 32,600 Fair Value $50,400 40,000 34,400 (a) Prepare the journal entry at December 31 (Pina's year-end) for 2020 2021, and 2022, to record the fair value option for these notes. (If no entry is required, select "No Entry" for the account titles and enter for the amounts.Credit account titles are automatically Indented when amount is entered. Do not indent manually) Account Titles and Explanation Debit Credit Date Dec 31, 2020 Dec 31, 2021 (a) Prepare the journal entry at December 31 (Pina's year-end) for 2020 2021 and 2022 to record the fair value option for these notes. (If no entry is required, select "No Entry" for the account titles and enter for the amounts.Credit account titles are automatically Indented when amount is entered. Do not indent manually) Date Account Titles and Explanation Debit Credit Dec 31, 2020 Dec 31, 2021 Dec 31, 2022 (6) At what amount will the note be reported on Pina's 2021 balance sheet? Note to be reported on Pins's 2021 balance sheet 5 (b) At what amount will the note be reported on Pina's 2021 balance sheet? Note to be reported on Pina's 2021 balance sheet $ (c) What is the effect of recording the fair value option on these notes on Pina's 2022 income? The effect of recording the fair value option would result in unrealized holding of $

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

Management And Cost Accounting

Authors: Charles T. Horngren, Alnoor Bhimani, Srikant M. Datar, George Foster

1st Edition

0130805475, 978-0130805478

More Books

Students also viewed these Accounting questions

Question

Contrast intelligence and emotional intelligence.

Answered: 1 week ago

Question

Briefly describe four guides to ethical decision-making

Answered: 1 week ago