Even though the investment is appropriately accounted for as AFS, the investor holds the bond until...
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Even though the investment is appropriately accounted for as AFS, the investor holds the bond until maturity date. Thus, the bond is settled at 12/31, Year 10, at its maturity value of $10,000, which is also its fair value on that date. Complete the amortization table below, rounding to the nearest whole dollar after each calculation. Date 4/30/Yr 8 6/30/8 12/31/Xx 8 6/30/X9 12/31/Yr 9 6/30/Yr10 12/31Yr. 10 Totals Debit 8.00% CASH Interest 133 12/31/XK 10 2,133 9.50% INTEREST INCOME X 117 X X X X UNREAL. G/L - OCI 4/30/X8 Post the appropriate amounts to the t-accounts below: 12/31/XK8 Credit 12/31/Xx9 12/31/X 10 % x 2 / 12) = %x__)= 1 1 )= % X % X % X /____) Plug due to rounding 0 474 2,481 Debit INVEST- AFS, Amort. of Discount Plug 74 348 4/30/X8 12/31/X8 20 12/31/Xx9 12/31/X 10 Amortized Carrying Value 10,000 FAIR VALUE ADJUSTMENT 0 Fair Value Adjustment 9,820 = 9,975 = 10,000 0 12/31/X 10 Fair Value 117 Journal Entries: 4/30/Xx8 INVESTMENT IN AFS - DEBT INTEREST RECEIVABLE CASH 6/30/Xx8 12/31/XK8 12/31/XK8 6/30/Xx9 12/31/XK9 12/31/XK9 6/30/Xx 10 CASH INVESTMENT IN AFS - DEBT INTEREST RECEIVABLE INTEREST INCOME 267 m Even though the investment is appropriately accounted for as AFS, the investor holds the bond until maturity date. Thus, the bond is settled at 12/31, Year 10, at its maturity value of $10,000, which is also its fair value on that date. Complete the amortization table below, rounding to the nearest whole dollar after each calculation. Date 4/30/Yr 8 6/30/8 12/31/Xx 8 6/30/X9 12/31/Yr 9 6/30/Yr10 12/31Yr. 10 Totals Debit 8.00% CASH Interest 133 12/31/XK 10 2,133 9.50% INTEREST INCOME X 117 X X X X UNREAL. G/L - OCI 4/30/X8 Post the appropriate amounts to the t-accounts below: 12/31/XK8 Credit 12/31/Xx9 12/31/X 10 % x 2 / 12) = %x__)= 1 1 )= % X % X % X /____) Plug due to rounding 0 474 2,481 Debit INVEST- AFS, Amort. of Discount Plug 74 348 4/30/X8 12/31/X8 20 12/31/Xx9 12/31/X 10 Amortized Carrying Value 10,000 FAIR VALUE ADJUSTMENT 0 Fair Value Adjustment 9,820 = 9,975 = 10,000 0 12/31/X 10 Fair Value 117 Journal Entries: 4/30/Xx8 INVESTMENT IN AFS - DEBT INTEREST RECEIVABLE CASH 6/30/Xx8 12/31/XK8 12/31/XK8 6/30/Xx9 12/31/XK9 12/31/XK9 6/30/Xx 10 CASH INVESTMENT IN AFS - DEBT INTEREST RECEIVABLE INTEREST INCOME 267 m
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Related Book For
Financial Reporting And Analysis
ISBN: 9781260247848
8th Edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
Posted Date:
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