Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I have tried to solve this problem but I have done some but I need to be clear and study how it is done pliease

I have tried to solve this problem but I have done some but I need to be clear and study how it is done pliease help me and more to come

On January 1 2021 TAAD Corp Purchses TARRA INC. Bonds that have a face value of $270000. The TARRA INC bonds have a stated interes tate of 10%. Interest is paid semiannually on June 30 and December 31, and the bonds mature in 10 years. For the bond of similiar risk and maturity, the market yeild on particular dates is as follows. (FV of $1, PV of $1, FVA of $1, PVA of $1,FVAD of $1, and PVAD of $1) use the appropriate factore from the tables of each factor)

January 1, 2021 11.0%

June 30 2021 12.0%

December 31 2021 14.0%

1 Calculate the Price TAAR Corp would have paid for the TERRA INC Bonds on January 1, 2021(ignore brokerage fees) and complete a journal entry to record the purchse

2) Analize and record all appropriate journal entries related to the bond investment during 2021, assuming TAAD Corp accountsfor the bonds as a held-to-maturity investment. TAAD Corp calculates interest revenue at the effective interest rate as of the date it purchased the bonds.

3) work on all appropraite journal entries related to the bonds investment during 2021, assuming that TAAD Corp close the fair value option when the bonds were purchased ,and that TAAD Corp determines fair value of the bonds semiannnually,TAAD inc calculates interest revenue at the effective interest rate as of the date it purchased the bonds

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

Step: 3

blur-text-image

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

Entrepreneurship

Authors: Andrew Zacharakis, William D Bygrave

5th Edition

1119563097, 9781119563099

More Books

Students also viewed these Accounting questions

Question

Mortality rate

Answered: 1 week ago

Question

Armed conflicts.

Answered: 1 week ago