Home / Questions / A held to maturity bond investment must use the effective rate interest method. 13) Under
A held to maturity bond investment must use the effective rate interest method.
13) Under private enterprise reporting an organization can use either the effective interest rate method or straight line to account for the amortization of their bond investment.
14) Investments in long-term bonds are shown on the balance sheet at their current market value.
15) From the buyer's perspective, a discount on a long-term investment in bonds means additional interest revenue while a premium means less interest revenue.
16) On May 1, 2010, Gigajoule Company paid $180,000 to purchase $200,000 of bonds that carry a 5% contract rate of interest and will mature in 5 years from the date of purchase. Interest on the bonds is paid May 1 and November 1 of each year. Gigajoule Company plans to hold the bonds until maturity and amortizes the premium or discount on bonds using the straight-line method each interest payment date. As of December 31, 2010, the bonds had a market value of $185,000.
a. Prepare all necessary journal entries for 2010 dealing with the investment in bonds.
b. Show how the bonds would be presented on the balance sheet dated December 31, 2010.
Dec 09 2019 View more View Less
What leadership behavior do you believe Jack Ma (Former CEO of Alibaba) engage in?(Requirements: use leadership grid analyze his leadership behavior with your own words)
Aug 24 2020country wise rules and regulations on crypto asset
Apr 05 2021What would the pH of a solution be if the [H^+] = 3.00 x 10^-5 moles/liter? please give me the right answer!!! in needs to be in exponential form
Jul 31 20211. Which of the following is characteristic of the marginal revenue product schedule for a resource?a. It approximates the firm's demand curve for the resource.b. It meas...
Apr 28 2021The 9 teachers in the Math Department are required to pick a random team out of 30 major league teams to cheer for in the next baseball season. What is the probability th...
May 27 2021That partially completed building has set there untouched for a year.
Aug 23 2021Tunney Industries can issue perpetual preferred stock at a price of $62.50 a share. The stock would pay a constant annual dividend of $4.50 a share. What is the company's...
Aug 02 2021Wellington Corporation estimates that it will have $500,000 available for capital investments next year. Half of this will be reserved for emergency projects and half wil...
Mar 29 2020Calculate the force in the tie rod BC and the reaction at the pinned support at point A for the rigid frame shown.
Jun 26 2020What is big data? Why is it important to marketing research?
Jul 03 2021