041711333237 Lafidan Rizata Febiola Tugas CH. 17 WEEK 13 PDF

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TUGAS AKM 2 – MINGGU 13E17 (Debt Investments) On January 1, 2019, Jennings SA purchased at par 10% bonds having a maturity value of €300,000. They are dated January 1, 2019, and mature January 1, 2024, with interest receivable December 31 of each year. The bonds are held to collect contractual cash ...

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Nama : Lafidan Rizata Febiola NIM : 041711333237 Kelas : AKM 2 – Kelas A2

TUGAS AKM 2 – MINGGU 13

E17.2 (Debt Investments) On January 1, 2019, Jennings SA purchased at par 10% bonds having a maturity value of €300,000. They are dated January 1, 2019, and mature January 1, 2024, with interest receivable December 31 of each year. The bonds are held to collect contractual cash flows. a. Prepare the journal entry at the date of the bond purchase. Jan 1, 2019

Debt Investment (Held to Maturity)

300,000

Cash

300,000

b. Prepare the journal entry to record the interest received for 2019. Dec 31, 2019

Cash

30,000

Interest Revenue (€300,000 × 10%)

30,000

c. Prepare the journal entry to record the interest received for 2020. Dec 31, 2020

Cash Interest Revenue (€300,000 × 10%)

30,000 30,000

E17.3 (Debt Investments) On January 1, 2019, Roosevelt Company purchased 12% bonds having a maturity value of $500,000 for $537,907.40. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2019, and mature January 1, 2024, with interest received December 31 of each year. Roosevelt's business model is to hold these bonds to collect contractual cash flows. a. Prepare the journal entry at the date of the bond purchase. Jan 1, 2019

Debt Investment

537,907.40

Cash

537,907.40

b. Prepare a bond amortization schedule. Schedule of Interest Revenue and Bond Premium Amortization 12% Bonds Sold to Yield 10% Carrying

Cash

Interest

Premium

Received

Revenue

Amortized

1/1/19

-

-

-

$537,907.40

31/112/19

$60,000

$53,790.74

$6,209.26

531,698.14

31/12/20

60,000

53,169.81

6,830.19

524,867.95

31/12/21

60,000

52,486.80

7,513.20

517,354.75

31/12/22

60,000

51,735.48

8,264.52

509,090.23

31/12/23

60,000

50,909.77

9,090.23

500,000.00

Date

Amount of Bonds

c. Prepare the journal entry to record the interest received and the amortization for 2019. Dec 31, 2019

Cash

60,000.00

Debt Investment

6,209.26

Interest Revenue

53,790.74

d. Prepare the journal entry to record the interest received and the amortization for 2020. Dec 31, 2019

Cash

60,000.00

Debt Investment

6,830.19

Interest Revenue

53,169.81

E17.6 (HFCS Debt Securities Entries and Financial Statement Presentation) At December 31, 2019, the held-for-collection and selling debt portfolio for Steffi Graf SA is as follows. Security

Amortized Cost

Fair Value

Unrealized Gain (Loss)

A

€17,500

€15,000

(€2,500)

B

12,500

14,000

1,500

C

23,000

25,500

2,500

Total

€53,000

€54,500

1,500

Previous fair value adjustment balance – Dr

400

Fair value adjustment – Dr

€1,100

On January 20, 2020, Steffi Graf SA sold security A for €15,100. The sale proceeds are net of brokerage fees. a. Prepare the adjusting entry at December 31, 2019, to report the portfolio at fair value. Dec 31, 2019

Fair Value adjustment (available for sale) Unrealized Holding Gain or Loss –

1,100 1,100

Income

b. Show the statement of financial position presentation of the investment related accounts at December 31, 2019. (Ignore notes presentation.) Steffi Graf, SA Balance Sheet As of December 31, 2019 Current assets: Equity investments

€ 54,500

Stockholder’s Equity: Common stock

xxx,xxx

Additional paid-in-capital

xxx,xxx

Retained Earnings

xxx,xxx xxx,xxx

Add: Accumulated OCI Total stockholders’ equity

1,500 €xxx,xxx

c. Prepare the journal entry for the 2020 sale of security A. Computation of realized gain or loss on sale of stock: Net proceeds from sale of security A

€ 15,100

Cost of security A

17,500

Loss on sale of stock Jan 20, 2020

€ (2,400)

Cash

15,100

Loss on sale of investment

2,400

Equity investments (available-for

17,500

sale)

E17.7 (Fair Value Option) Refer to the information in E17.3 and assume that Roosevelt elected the fair value option for this held-for-collection investment. a. Prepare any entries necessary at December 31, 2019, assuming the fair value of the bonds is $540,000. Dec 31, 2019

Debt Investment

8,301.86

Unrealized Holding Gain or Loss –

8,301.86*

Income *($540,000 – $531,698.14)

b. Prepare any entries necessary at December 31, 2020, assuming the fair value of the bonds is $525,000. Dec 31, 2020

Unrealized Holding Gain or Loss –

8,169.81

Income Debt Investment

8,169.81*

* ($533,169.81 – $525,000) Carrying Value at 12/31/19............................. Amortization ................................................... Carrying Value at 12/31/20.................. *amortisasi dapat dilihat pada exercise 17 – 3

$540,000.00 (6,830.19)* $533,169.81

E17.9 (Comprehensive Income Disclosure) Assume the same information as E17.6 and that Steffi Graf SA reports net income in 2019 of €120,000 and in 2020 of €140,000. Total holding gains (including any realized holding gain or loss) equal €40,000 in 2020. a. Prepare a statement of comprehensive income for 2019, starting with net income. Steffi Graf SA Statement of Comprehensive Income For the Year Ended December 31, 2019 Particulars

Amount in €

Net income

120,000

Other comprehensive income Unrealized holding gain

1,100

Comprehensive income

121,100

b. Prepare a statement of comprehensive income for 2020, starting with net income. Steffi Graf SA Statement of Comprehensive Income For the Year Ended December 31, 2020 Net income

140,000

Other comprehensive income Holding gains Add: Reclassification adjustment for loss included in net income

40,000 2,400

42,400 182,400

Comprehensive Income

Accum. other comprehensive income: Beginning bal. Jan 1, 2020 Current period OCI Amount reclassified from accum. OCI

1,100 40,000 2,400

Unrealized holding gain

42,400

Ending bal. Dec 31, 2020

43,400...