On October 1, Qilan Ltd. purchased 7% bonds with a face value of S1,OOO for trading purposes,
Question:
(a) The purchase of the investment,
(b) The December 31 interest accrual, and
(c) The year-end fair value adjustment. Assuming Qilan applies ASPE, uses the effective interest method, and follows a policy of reporting interest income separately, prepare Qilan's journal entries for
(d) The December 31 interest accrual, and
(e) The year-end fair value adjustment. Round amounts to two decimal places.
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...
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Related Book For
Intermediate Accounting
ISBN: 978-0176509736
10th Canadian Edition, Volume 1
Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,
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