Rumpi Company purchased $50,000 of 7 percent bonds of Evermistress Corporation on January 1, 2015, for $48,689. The bonds mature in 3 years and the yield is 8 percent. The interest is payable on January 1 and July 1. Instructions 1. Complete the amortisation schedule below Bond Discount/ Premium Amortization Date Cash Received Interest Revenue Carrying Amount of Bonds 2. Prepare the journal entry on 1 January 2015, 1 July 2015, 31 December 2015, 1 January 2016 3. Assuming this bond is categorized under FVOCI, assume that the fair value on Dec 31. 2015 was $50.060. prepare the fair value adjustment entry 4. II Rumpi Company sells its investment in Evermistress on August 1, 2016, at 110 plus accrued interest. compute the realised gain/loss on the sale and record the sale of the bonds!

Rumpi Company purchased $50,000 of 7 percent bonds of Evermistress Corporation on January 1, 2015, for $48,689. The bonds mature in 3 years and the yield is 8 percent. The interest is payable on January 1 and July 1. Instructions 1. Complete the amortisation schedule below Bond Discount/ Premium Amortization Date Cash Received Interest Revenue Carrying Amount of Bonds 2. Prepare the journal entry on 1 January 2015, 1 July 2015, 31 December 2015, 1 January 2016 3. Assuming this bond is categorized under FVOCI, assume that the fair value on Dec 31. 2015 was $50.060. prepare the fair value adjustment entry 4. II Rumpi Company sells its investment in Evermistress on August 1, 2016, at 110 plus accrued interest. compute the realised gain/loss on the sale and record the sale of the bonds!

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 6PB: Edward Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...

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