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Homework answers / question archive / Bakersfield College ACG 2021 1)On January1 2016 Rupar Retailers purchased $100,000 of Anand Company bonds at a discount of $5,000
Bakersfield College
ACG 2021
1)On January1 2016 Rupar Retailers purchased $100,000 of Anand Company bonds at a discount of
$5,000. The Anand bonds pay 6% interest but were purchased when the market interest rate was 7% for bonds of similar risk and maturity. The bonds pay interest semiannually on January 1 and July 1 of each year. Rupar accounts for the bonds as a held-to-maturity investment, and uses the effective interest method. In Rupar’s December 31, 2016 journal entry to record the second period of interest, Rupar would record a credit to interest revenue of:
a. $3,336.
b. $3,325.
c. $3,000.
d. $3,500.
. d. Reclassify the investment as held to maturity, but there would be no income effect.
now more appropriately be classified as available for sale, Ziggy would:
$18,000. Dyckman should carry the Thomas investment on its balance sheet at: a. $20,000.
b. $18,000.
b. $250,000.
Security |
Cost |
Fair value 12/31/2016 |
A |
$80,000 |
$84,000 |
B |
60,000 |
54,000 |
C |
22,000 |
22,000 |
What amount will be reported in the balance sheet for this portfolio at December 31, 2016, and how will it be classified?
Amount Classification
a. $284,400.
b. $300,000.
c. $315,600.
d. $360,000.
a. $0.
Security |
Cost |
Fair Value |
X |
$380,000 |
$352,000 |
Y |
180,000 |
160,000 |
Z |
420,000 |
414,000 |
What amount of loss on these securities should Hobson include in its income statement for the six months ended June 30, 2016?
a. $41,000.
b. $54,000.
c. $13,000.
d. $ 0.
Effect on Total Cash Flows
Effect on Net Income