Intermediate Accounting Quizzes PDF

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4 INVESTMENT IN DEBTSECURITIES On July 1, 2021, Queensland Company purchased P5,000,000 face amount 8% bonds for P4,615,000 to be held as financial assets at amortized cost. The bonds were purchased to yield 10% interest.The bonds pay interest semiannually on January 1 and July 1 using the interest ...

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4.2 INVESTMENT IN DEBT SECURITIES 1. On July 1, 2021, Queensland Company purchased P5,000,000 face amount 8% bonds for P4,615,000 to be held as financial assets at amortized cost. The bonds were purchased to yield 10% interest. The bonds pay interest semiannually on January 1 and July 1 using the interest method. How much is the carrying amount of the investment in bonds on July 1, 2021?

2. On July 1, 2021, Queensland Company purchased P5,000,000 face amount 8% bonds for P4,615,000 to be held as financial assets at amortized cost. The bonds were purchased to yield 10% interest. The bonds pay interest semiannually on January 1 and July 1 using the interest method. On December 31, 2021, how much is the carrying amount of the investment in bonds?

3. On January 1, 2021, Germany Company purchased 12% bonds with a face amount of P4,000,000 for P4,500,000. The bonds payable effective rate is 10%. The bonds are dated January 1, 2021, and pay interest annually on December 31 of each year. The bond's quoted price on December 31, 2021, is P115. The entity has irrevocable use of the fair value option. How much is the gain on change in fair value on December 31, 2021?

4. On January 1, 2021, Aruba Company purchased 10% bonds with a face amount of P5,000,000 at P4,760,000. The bonds payable effective rate is 12%. The bonds are dated January 1, 2019, and pay interest annually on December 31 of each year. The bond's quoted price on December 31, 2021, is P102. The entity has irrevocable use the fair value at other comprehensive income. Determine the Unrealized gain - OCI, December 31, 2021.

5. Haiti Company purchased 5,000 bonds per ₱1,000 face amount, 10% bonds to yield 12%. The carrying amount of the bonds on January 1, 2021, is P4,760,000. The bonds mature on January 1, 2024, and pay interest annually on December 31. The entity sold 1,500 bonds on December 31, 2021, for P1,920,000 after the interest has been received. How much is the gain on sale on December 31, 2021?

QUIZ 4.1 INVESTMENT IN DEBT SECURITIES 1. On January 1, 2021, Brazil Company acquired 5-year bonds with a face amount of P2,000,000. The nominal rate is 12% and the effective rate is 14% The interest is payable annually on December 31. The entity used the effective interest method. The entity used 2 decimal places for the PV factor How much is the present value of Investment in bonds on December 31, 2021?

2. On January 1, 2021, Myanmar Company acquired 5-year bonds with a face amount of P1,500,000. The entity also paid a bond issue cost of P150,000. The nominal rate is 10%. The effective rate after considering bond issue cost is 9%. The interest is payable annually on December 31. The entity used the effective interest method. The entity used 2 decimal places for the PV factor. How much is the purchase price of Investment in bonds on January 1, 2021?

3. On January 1, 2021, Myanmar Company acquired 5-year bonds with a face amount of P1,500,000. The entity also paid a bond issue cost of P150,000. The nominal rate is 10%. The effective rate after considering bond issue cost is 9%. The interest is payable annually on December 31. The entity used the effective interest method. The entity used 2 decimal places for the PV factor. How much is the interest received on December 31, 2021?

4. Hawaii Company purchased 2,000 per ₱500 face amount, 12% bonds to yield 14%. The carrying amount of the bonds on January 1, 2021, is P953,600. The bonds mature on January 1, 2024, and pay interest annually on December 31. The entity sold 1,200 bonds on December 31, 2021, for P615,000 after the interest has been received. How much is the Gain on sale on December 31, 2021 (round-of answer to the nearest peso value)?

5. On October 1, 2021, Switzerland Company purchased P5,000,000 face amount 9% bonds for P4,820,000 to be held as financial assets at amortized cost. The bonds were purchased to yield 11% interest. The bonds are dated January 1, 2021, and pay interest annually on December 31 using the interest method. How much is the carrying amount of the investment in bonds on October 1, 2021?

6. On January 1, 2021, Alicia Company purchased 12% bonds with a face amount of P1,800,000 at P1,716,480.

The bonds payable effective rate is 14%. The bonds will mature on January 1, 2024, and pay interest annually on December 31 of each year. The bond's quoted price on December 31, 2021, is P103. The entity has irrevocable use of the fair value at other comprehensive income. (FVOCI). How much the Unrealized gain - OCI, December 31, 2021 (round-of answer to the nearest peso value)?...