On July 1, 2020, Ayayai Aggregates Ltd. purchased 7% bonds having a maturity value of $50,000...

 

Transcribed Image Text:

On July 1, 2020, Ayayai Aggregates Ltd. purchased 7% bonds having a maturity value of $50,000 for $51,755. The bonds provide the bondholders with a 6% yield. The bonds mature four years later, on July 1, 2024, with interest receivable June 30 and December 31 of each year. Ayayai uses the effective interest method to allocate unamortized discount or premium. The bonds are accounted for using the FV-OCI model with recycling. Ayayai has a calendar year end. The fair value of the bonds at December 31, 2020 and 2021, was $51,780 and $51,001, respectively. Assume fair value adjustments are recorded at year end only. Immediately after collecting interest on December 31, 2021, the bonds were sold for $51,001. Prepare a bond amortization schedule to December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275.) Schedule of Interest Revenue and Bond Premium Amortization Effective-Interest Method Date Cash Received Interest Revenue Premium Amortized Amortize July 1, 2020 Dec. 31, 2020 June 30, 2021 Dec. 31, 2021 %24 %24 %24 %24 On July 1, 2020, Ayayai Aggregates Ltd. purchased 7% bonds having a maturity value of $50,000 for $51,755. The bonds provide the bondholders with a 6% yield. The bonds mature four years later, on July 1, 2024, with interest receivable June 30 and December 31 of each year. Ayayai uses the effective interest method to allocate unamortized discount or premium. The bonds are accounted for using the FV-OCI model with recycling. Ayayai has a calendar year end. The fair value of the bonds at December 31, 2020 and 2021, was $51,780 and $51,001, respectively. Assume fair value adjustments are recorded at year end only. Immediately after collecting interest on December 31, 2021, the bonds were sold for $51,001. Prepare a bond amortization schedule to December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275.) Schedule of Interest Revenue and Bond Premium Amortization Effective-Interest Method Date Cash Received Interest Revenue Premium Amortized Amortize July 1, 2020 Dec. 31, 2020 June 30, 2021 Dec. 31, 2021 %24 %24 %24 %24

Answer rating: 100% (QA)

answer Date cash received interest Revenue premium amortized amortized cost of ... View the full answer