Question
Pharaoah Company purchases $3200000 of 9%, 5 -year bonds from Wildhorse Inc on January 1, 2021 with interest payable on July 1 and January 1.
Pharaoah Company purchases $3200000 of 9%, 5 -year bonds from Wildhorse Inc on January 1, 2021 with interest payable on July 1 and January 1. The bonds sold for $3324740 at an effective interest rate of 8%. Using the effective-interest method, Pharaoh Company decreased the Available for Sale Debt Securities account for the Wildhorse Inc. bonds on July 1, 2021, and December 31, 2021 by the amortized premiums of $11020 and $11380, respectively. At December 31, 2021, the fair value of the Wildhorse Inc. bonds was $3380000. What should Pharaoh Company report as other comprehensive income as a separate component of stockholders equity?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started