Question: I need help with Problem 2, problem 1 is right. Problem 1 on 1/2/2022 Nummer Corp. purchased 2-year, 2% bonds with a face value of

I need help with Problem 2, problem 1 is right.

I need help with Problem 2, problem 1 is right. Problem 1

Problem 1 on 1/2/2022 Nummer Corp. purchased 2-year, 2% bonds with a face value of $300,000. On that date, the market rate for similar securities was 3%. Nummer has placed these bonds in an actively-traded portfolio. Subsequent information related to bonds is as follows: On 12/31/2022 the fair value was $298,000 On 1/1/2023 Nummer sold the bonds for $299,000 Requirements: A. What should be the purchase price? ? B. Create an amortization table for all years. C. Create journal entries for the purchase and subsequent interest earnings for 2022 as well as any needed journal entries to record unrealized gains/losses. D. What is the carrying value of the bonds on 12/31/2022 after the first amortization and any unrealized gains/losses have been recorded? E. How much of a gain or loss will Nummer realize in its Income Statement in 2023? F. Create the journal entry for the sale on 1/1/2023. A Purchase Price (enter here) 294,218 C&F Journal Entry Date 1/2/2022 Cr$ Particulars Bonds Investments (Trading) $ 294,218.42 Cash (To record the bond purchased as Trading Investments) FV FVA Acot $ 294,218.42 B Amortization Table Date 1/2/2022 6/30/2022 12/31/2022 6/30/2023 12/31/2023 Cash Interest 3,000 3,000 4,413.28 3,000 4,434.48 3,000 4,455.99 3,000 4,477.83 Principal Balance $294,218.42 1,413.28 295,631.70 1,434.48 297,066.17 1,455.99 298,522.16 1,477.83 300.000.00 300,000.00 298,000 934 6/30/2022 3,000.00 1,413.28 Cash $ Premium Amortization Interest Revenue (To record the interest earned) 4,413.28 D Carrying Value of Investment (enter here) As of 12/31/2022 297,066 12/31/2022 3,000.00 1,434.48 Cash $ Premium Amortization Interest Revenue (To record the interest earned) $ 4,434.48 E Gain of Loss on 2023 Income Statement (enter here) 1,000 12/31/2022 933.83 Fair value adjustments Unrealized Gain (To record the fair value adjustments) 933.83 1/1/2023 Cash 299,000 Bonds Investments $ Gain on sale of investments $ (To record the sale of bond investments at again of 1000) 298,000 1,000 Problem 2 Assume the same facts as in Problem 1, above, except Nummer has placed these bonds in an as-needed (investment will be sold when cash is needed) portfolio. Requirements: A. What type of investment is this? B. What should be the purchase price? C. Create journal entries for the purchase and subsequent interest earnings for 2022 as well as any needed journal entries to record unrealized gains/losses D. What is the carrying value of the bonds on 12/31/2022 after the first amortization and any unrealized gains/losses have been recorded? E. How much of a gain or loss will Nummer realize in its Income Statement in 2023? A Type of Investment (select) C&F Journal Entry SHOW ANY CALCULATIONS HERE B Purchase Price (enter here) D Carrying Value of Investment (enter here) As of 12/31/2022 E Gain of Loss on 2023 Income Statement (enter here)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!