CKH Limited invested its excess cash in three bonds as shown below on 1 January 2020:...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
CKH Limited invested its excess cash in three bonds as shown below on 1 January 2020: $100,000 of 8 percent annual coupon bonds of M&M at a price of $106,930.21. The maturity and yield are 4 years and 6 percent respectively. $50,000 of 8 percent annual coupon bonds of HHCC at a price of $47,513.15. The maturity and yield are 3 years and 10 percent respectively. $40,000 of 4 percent annual coupon bonds of IA at a price of $43,046.18. The maturity and yield are 4 years and 2 percent respectively. CKH intends to hold M&M until maturity. HHCC is held with intention to sell before maturity but IA is only for trading. Its financial year ended is on 31 December. The estimated fair value of the bonds as at 31 December 2020 are shown as below. M&M HHCC LA All the interest are payable on 31 December each year. Required: [All figures MUST be rounded to an integer (e.g. 50% and $125,000) by taking full decimal places in the middle steps and round the final answers into the whole dollar amount] a. Prepare ALL necessary journal entries to record the above transactions and events for 2020. 106,000 49,500 41,000 b. On 1 January 2021, CKH sells the IA bond for $42,000. Prepare all the necessary journal entries for this transaction. (Notes: You are required to state the date and the workings in detail for the three debt investments separately when preparing journal entries. Otherwise, marks may be deducted.) CKH Limited invested its excess cash in three bonds as shown below on 1 January 2020: $100,000 of 8 percent annual coupon bonds of M&M at a price of $106,930.21. The maturity and yield are 4 years and 6 percent respectively. $50,000 of 8 percent annual coupon bonds of HHCC at a price of $47,513.15. The maturity and yield are 3 years and 10 percent respectively. $40,000 of 4 percent annual coupon bonds of IA at a price of $43,046.18. The maturity and yield are 4 years and 2 percent respectively. CKH intends to hold M&M until maturity. HHCC is held with intention to sell before maturity but IA is only for trading. Its financial year ended is on 31 December. The estimated fair value of the bonds as at 31 December 2020 are shown as below. M&M HHCC LA All the interest are payable on 31 December each year. Required: [All figures MUST be rounded to an integer (e.g. 50% and $125,000) by taking full decimal places in the middle steps and round the final answers into the whole dollar amount] a. Prepare ALL necessary journal entries to record the above transactions and events for 2020. 106,000 49,500 41,000 b. On 1 January 2021, CKH sells the IA bond for $42,000. Prepare all the necessary journal entries for this transaction. (Notes: You are required to state the date and the workings in detail for the three debt investments separately when preparing journal entries. Otherwise, marks may be deducted.)
Expert Answer:
Answer rating: 100% (QA)
a Journal Entries for 2020 To record the purchase of MM bonds on 1 January 2020 Debit MM Bonds 10000... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these accounting questions
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-6. On December 12, Irene purchased the building where her store is located. She paid...
-
What implications might the difference in initial training provision between the USA and Germany have for the organisation of work and the character of relationships between managers and...
-
Find I1 and V0 in the circuit infigure. ww- 2 kn 8 kn Vo 4 kn 12 V 6 kn
-
A network for a process plant is shown in Fig P19.7. (a) Calculate the energy targets for \(\Delta T_{\min }=10{ }^{\circ} \mathrm{C}\) and show a design that achieves these targets. (b) Explain why...
-
Do you think that private foundations should encourage and be allowed to fund lobbying activities? Why or why not?
-
1. What managerial roles is Clarence Otis emphasizing in the case just presented? 2. What challenges would restaurant managers face in implementing Otiss approach to keeping the restaurants...
-
ABBB-rated corporate bond has a yield to maturity of 12.9 % 12.9%. A U.S. Treasury security has a yield to maturity of 11.3 % 11.3%. These yields are quoted as APRs with semiannual compounding. Both...
-
Accenture recently published an article titled Meet the Finance 2020 Workforce, 18 suggesting that accountants will need to not only embrace traditional financial questions of What happened? and Why...
-
Discuss noxious and nourishing people. Oddly, both can serve as a benefit to us. Which one of these describes your current self and personality? Are you sure? As you look back upon your cultural...
-
Describe the reinforcing loop that led to a toilet paper shortage in March/April 2020, as COVID lockdowns first hit. But some level of stability has been found - what are the balancing factors?
-
Reflect on your own past experience engaged in a leadership or management role and discuss the types of skills you believe were important when engaged in one of the management functions.
-
LSMU makes decorative flower pots. Each flower pot sells for a revenue of $10. LSMU has estimated three possible levels of demand for flower pots in the coming year: there is a 30% chance the demand...
-
A person puts an empty chessboard on a table and puts one grain of rice on the first square. Then two grains on the second square, four on the third, eight on the fourth, and so forth, doubling the...
-
Boyle's Law states that when a sample of gas is compressed at a constant temperature, the pressure P and volume V satisfy the equation PV = C , where C is a constant. Suppose that at a certain...
-
Educational innovation according to Ibrahim (1988) is innovation to solve educational problems. Therefore, educational innovation is felt or observed as something new for individuals or groups of...
-
What mass of H2 will be produced when 122 g of Zn are reacted? Zn(s) + 2HCl(aq) ( ZnCl2(aq) + H2(g)
-
Matthew borrows $250,000 to invest in bonds. During 2012, his interest on the loan is $30,000. Matthew's interest income from the bonds is $10,000. This is Matthew's only investment income. a....
-
Deborah purchases a new $30,000 car in 2012 to use exclusively in her business. If Deborah does not elect to expense or take bonus depreciation in 2012 and holds the car until it is fully...
-
Steve Jackson (age 51) is a single taxpayer living at 3215 Pacific Dr., Del Mar, CA 92014. His Social Security number is 465-88-9415. In 2012, Steve's earnings and income tax withholding as the...
-
Which statement best describes which theoretical perspective nurse managers should use to motivate their employees? A. Each employee has individual needs, so no one theory applies to all employees....
-
Think of a time when you have been very satisfied with a job you have held. What made that job satisfying? Also think of a time when you have been dissatisfied with a job you have held. What made...
-
Which statement might have been made by a manager who espouses the Theory X approach to management? A. Employees on my unit are very goal-directed and need little supervision to get the job done. B....
Study smarter with the SolutionInn App