ABC Company issued 20,000 bonds with a face value of Php 1,000 each with a nominal...
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ABC Company issued 20,000 bonds with a face value of Php 1,000 each with a nominal interest rate of 12% per annum that is due every June 30 and December 31 of each year. The bonds are dated January 1, 2020 and has a term of 5 years. The following companies acquired the following quantity of ABC bonds: Bondholders Purchase date Number of bonds acquired Effective interest rate Business model Periods 4.00% 1 0.96154 2 3 4 4.50% 0.95694 0.92456 0.91573 0.88900 DEF Corporation 1/1/2020 5,000 10% Collection of contractual cashflows 5.00% 5.50% 0.95238 0.94787 0.89845 0.85161 0.90703 0.87630 0.86384 0.85480 0.83856 0.82270 0.80722 5 0.82193 0.80245 0.78353 0.76513 0.79031 0.76790 0.74622 0.72525 7 0.75992 0.73483 0.71068 0.68744 6 8 9 0.73069 0.70319 0.67684 0.65160 0.70259 0.67290 0.64461 0.61763 0.67556 0.64393 0.61391 0.58543 10 JKL Company 7/1/2020 3,000 10.00% 12.00% 11.00% Collection of contractual cashflows and sale in an open market 6.00% 0.94340 0.89000 0.83962 0.79209 0.74726 0.70496 0.66506 11% 0.62741 0.59190 0.55839 Additional information: (a) The effective interest method is used in the amortization of discount or premium. (b) The following are the effective interest rate on each reported date. 9.00% 8.00% Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2024 QWERT Incorporated 1/1/2021 1,000 9% Held for trading 1. Using the information for DEF Corporation, compute for the Carrying Value, September 30, 2023. 2. Using the information for DEF Corporation, compute the Unamortized discount/premium, August 30, 2024. 3. Using the information for DEF Corporation, if 2,000 bonds are sold for 102 on January 1, 2024, how much is the gain or loss on sale of the bond investment? 4. Using the information for DEF Corporation, if 2,000 bonds are sold for 97 on October 1, 2024, how much is the gain or loss on sale of the bond investment?___ 5. Using the information for DEF Corporation, if 2,000 bonds are sold for 105 on October 1, 2024. how much is the total cash proceeds? ABC Company issued 20,000 bonds with a face value of Php 1,000 each with a nominal interest rate of 12% per annum that is due every June 30 and December 31 of each year. The bonds are dated January 1, 2020 and has a term of 5 years. The following companies acquired the following quantity of ABC bonds: Bondholders Purchase date Number of bonds acquired Effective interest rate Business model Periods 4.00% 1 0.96154 2 3 4 4.50% 0.95694 0.92456 0.91573 0.88900 DEF Corporation 1/1/2020 5,000 10% Collection of contractual cashflows 5.00% 5.50% 0.95238 0.94787 0.89845 0.85161 0.90703 0.87630 0.86384 0.85480 0.83856 0.82270 0.80722 5 0.82193 0.80245 0.78353 0.76513 0.79031 0.76790 0.74622 0.72525 7 0.75992 0.73483 0.71068 0.68744 6 8 9 0.73069 0.70319 0.67684 0.65160 0.70259 0.67290 0.64461 0.61763 0.67556 0.64393 0.61391 0.58543 10 JKL Company 7/1/2020 3,000 10.00% 12.00% 11.00% Collection of contractual cashflows and sale in an open market 6.00% 0.94340 0.89000 0.83962 0.79209 0.74726 0.70496 0.66506 11% 0.62741 0.59190 0.55839 Additional information: (a) The effective interest method is used in the amortization of discount or premium. (b) The following are the effective interest rate on each reported date. 9.00% 8.00% Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2024 QWERT Incorporated 1/1/2021 1,000 9% Held for trading 1. Using the information for DEF Corporation, compute for the Carrying Value, September 30, 2023. 2. Using the information for DEF Corporation, compute the Unamortized discount/premium, August 30, 2024. 3. Using the information for DEF Corporation, if 2,000 bonds are sold for 102 on January 1, 2024, how much is the gain or loss on sale of the bond investment? 4. Using the information for DEF Corporation, if 2,000 bonds are sold for 97 on October 1, 2024, how much is the gain or loss on sale of the bond investment?___ 5. Using the information for DEF Corporation, if 2,000 bonds are sold for 105 on October 1, 2024. how much is the total cash proceeds?
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To answer your questions well need to calculate the carrying value unamortized discountpremium gain or loss on the sale of bond investment and total cash proceeds for DEF Corporation based on the prov... View the full answer
Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
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