Simbala, Andi Te’a Mari O.
Intermediate Accounting (TTh 8:00 to 11:00)
Problem 19 – 3
Requirement A
Date
Particulars
Debit
Credit
March 1
Trading Securities (2,000,000 x 93%)
1,860,000
Interest Income (2,000,000 x 12% x 1/12)
20,000
Cash
1,880,000
April 1
Trading Securities (4,000,000 x 95%)
3,800,000
Interest Income (4,000,000 x 12% x 1/12)
40,000
Cash
3,840,000
Aug 1
Cash (2,000,000 x 12% x 6/12)
120,000
Interest Income
120,000
Sept 1
Cash (4,000,000 x 12% x 6/12)
240,000
Interest Income
240,000
Oct 1
Cash (1,050,000 + 10,000)
1,060,000
Interest Income (1,000,000 x 12% x 1/12)
10,000
Trading Securities
950,000
Gain on Sale of Trading Securities
100,000
Dec 1
Cash (2,000,000 + 80,000)
2,080,000
Trading Securities
1,860,000
Interest Income (2,000,000 x 12% x 4/12)
80,000
Gain on Sale of Trading Securities
140,000
Dec 31
Accrued Interest Receivable (3,000,000 x 12% x 4/12)
120,000
Interest Income
120,000
Dec 31
Unrealized Loss – TS (2,850,000 – 2,700,000)
150,000
Trading Securities
150,000
Requirement B
Current Assets:
Trading Securities , at Fair Value ( 3,000,000 x 90) 2,700,000
Problem 19-5
Date
Particulars
Debit
Credit
2019
Oct
1
Investment in Bonds
4,300,000
Interest Income
100,000
Cash
4,400,000
Dec
31
Accrued Interest Receivable
200,000
Interest Income
200,000
(4,000,000, 10% x 6/12)
Interest Income
12,000
Investment in Bonds
12,000
2020
Jan
1
Cash
200,000
Accrued Interest Receivable
200,000
July
1
Cash (4,000,000 x 10% x 6/12)
200,000
Interest Income
200,000
Dec
31
Accrued Interest Receivable
200,000
Interest Income
200,000
Interest Income (4,000 x 12)
48,000
Investment in Bonds
48,000
Problem 19- 6
Date
Particulars
Debit
Credit
2019
May
1
Investment in Bonds
5,640,000
Interest Income
180,000
Cash
5,820,000
Aug
1
Cash
360,000
Interest Income (6,000,000 x 12% x 6/12)
360,000
Dec
31
Accrued Interest Receivable
300,000
Interest Income (6,000,000 x 12% x 5/12)
300,000
Investment in Bonds
64,000
Interest Income
64,000
2020
Jan
1
Interest Income
300,000
Accrued Interest Receivable
300,000
Feb
1
Cash (6,000,000 x 12% x 6/12)
360,000
Interest Income
360,000
Aug
1
Cash
360,000
Interest Income
360,000
Dec
31
Accrued Interest Receivable
300,000
Interest Income
300,000
Investment in Bonds
96,000
Interest Income (8,000 x 12)
96,000
2021
Jan
1
Interest Income
300,000
Accrued Interest Receivable
300,000
Feb
1
Cash
360,000
Interest Income
360,000
May
1
Investment in Bonds
32,000
Investment Income (8,000 x 4)
32,000
Cash
6,480,000
Investment in Bonds
5,832,000
Interest Income
180,000
Gain on Sale of Bonds
468,000
Problem 19-7
Requirement A
Schedule of Amortization : Bond Outstanding Method
Year
Bond Outstanding
Fraction
Amortization
2019
1,000,000
10/30
50,000
2020
800,000
8/30
40,000
2021
600,000
6/30
30,000
2022
400,000
4/30
20,000
2023
200,000
2/30
10,000
3,000,000
150,000
Requirement B
Date
Particulars
Debit
Credit
2019
Jan
1
Investment in Bonds
1,150,000
Cash
1,150,000
June
30
Cash
60,000
Interest Income (1,000,000 x 12% x 6/12)
60,000
Dec
31
Cash
60,000
Interest Income
60,000
Interest Income
50,000
Investment in Bonds
50,000
Problem 20-7
Requirement A
Date
Interest
Received
Interest
Income
Discount
Amortization
Carrying
Amount
01/01/2019
4,742,000
12/31/2019
300,000
379,360
79,360
4,821,360
12/31/2020
300,000
385,709
85,709
4,907,069
12/31/2021
300,000
392,931
92,931
5,000,000
Requirement B
Date
Particulars
Debit
Credit
2019
Jan
1
Financial Asset – FVOCI
4,742,000
Cash
4,742,000
Dec
31
Cash
300,000
Interest Income
300,000
Financial Asset – FVOCI
79,360
Interest Income
79,360
Financial Asset – FVOCI
428,640
Unrealized Gain – OCI
428,640
2020
Dec
31
Cash
300,000
Interest Income
300,000
Financial Asset – FVOCI
85,709
Interest Income
85,709
Financial Asset – FVOCI
164,291
Unrealized Gain – OCI
164,291
2021
Dec
300,000
Interest Income
300,000
Financial Asset – FVOCI
92,931
Interest Income
92,931
Cash
5,000,000
Unrealized Gain – OCI
592,931
Financial Asset – FVOCI
5,592,931
