Gander Corp. is a small public company with a December 31 fiscal year-end. At the end of
Question:
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Required:
a. Determine the investment cost of the three investments on January 1, 2012.
b. Prepare amortization schedules for the medium-term government bonds and the corporate bonds. Use a computer spreadsheet to help you do your calculations.
c. For each of the three investments, determine the following amounts for each fiscal year:
- Balance sheet asset;
- Income;
- Other comprehensive income; and
- Cumulative other comprehensive income component of equity.
d. Had Gander classified the medium-term government bonds and the corporate bonds as held-to-maturity financial assets, how much would have been the total amount of income over the five years for each of the type of bonds?
e. I lad Gander classified the medium-term government bonds and the corporate bonds as held-for-trading financial assets, how much would have been the total amount of income over the five years for each of the type of bonds? What would be different under this scenario?
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Step by Step Answer:
aThe investment costs are 1000000 1044518 and 920146 calculated below Note that no calculations are required for the shortterm government bonds because the yield equals the coupon rate so these bonds ...View the full answer
