Problem #1 - On January 1, 2022, Ramos Enterprise acquired bonds of Amazing Widgets, Inc. Additional...
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Problem #1 - On January 1, 2022, Ramos Enterprise acquired bonds of Amazing Widgets, Inc. Additional information concerning the bond investment follows. Par value of bonds acquired $2,000,000 Acquisition cost 1,850,000 Stated rate of bonds 5% Expected yield for Ramos Enterprises 8% The interest is received on January 1 of each year, and the bonds mature January 1, 2025. The bonds are classified as held-to- maturity. Instructions: a) Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the straight-line method. b) Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the effective-interest method. c) Prepare the journal entry for the interest revenue and the discount amortization under the straight-line method at December 31, 2023. d) Prepare the journal entry for the interest revenue and the discount amortization under the effective-interest method at December 31, 2023. Problem #1 - On January 1, 2022, Ramos Enterprise acquired bonds of Amazing Widgets, Inc. Additional information concerning the bond investment follows. Par value of bonds acquired $2,000,000 Acquisition cost 1,850,000 Stated rate of bonds 5% Expected yield for Ramos Enterprises 8% The interest is received on January 1 of each year, and the bonds mature January 1, 2025. The bonds are classified as held-to- maturity. Instructions: a) Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the straight-line method. b) Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the effective-interest method. c) Prepare the journal entry for the interest revenue and the discount amortization under the straight-line method at December 31, 2023. d) Prepare the journal entry for the interest revenue and the discount amortization under the effective-interest method at December 31, 2023.
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Related Book For
Intermediate Accounting IFRS
ISBN: 9781119607519
4th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
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