Question
On January 1, 2018, NFB Visual Aids issued $800,000 of its 20-year, 10% bonds. The bonds were priced to yield 12%. Interest is payable semiannually
On January 1, 2018, NFB Visual Aids issued $800,000 of its 20-year, 10% bonds. The bonds were priced to yield 12%. Interest is payable semiannually on June 30 and December 31. NFB Visual Aids records interest expense at the effective rate and elected the option to report these bonds at their fair value. On December 31, 2018, the fair value of the bonds was $686,000 as determined by their market value in the over-the-counter market. General (risk-free) interest rates did not change during 2021. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1-a. Determine the price of the bonds at January 1, 2018. 1-b to 4. Prepare the necessary Journal entries.
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| No | Date | General Journal | Debit | Credit |
|---|---|---|---|---|
| 1 | January 01 | Cashselected answer correct | not attempted | not attempted |
| Discount on bonds payableselected answer correct | not attempted | not attempted | ||
| Bonds payableselected answer correct | not attempted | not attempted | ||
| 2 | June 30 | Interest expenseselected answer correct | not attempted | not attempted |
| Discount on bonds payableselected answer correct | not attempted | not attempted | ||
| Cashselected answer correct | not attempted | not attempted | ||
| 3 | December 31 | Interest expenseselected answer correct | not attempted | not attempted |
| Discount on bonds payableselected answer correct | not attempted | not attempted | ||
| Cashselected answer correct | not attempted | not attempted | ||
| 4 | December 31 | Unrealized holding lossOCIselected answer correct | not attempted | not attempted |
| Fair value adjustmentselected answer correct | not attempted | not attempted |
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Do It Yourself Home Energy Audits 140 Simple Solutions To Lower Energy Costs, Increase Your Home's Efficiency, And Save The Environmen
Authors: David Findley
1st Edition
0071636390, 978-0071636391
