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When the selling price of the bond is more than the book value of the bond then there will be gain.
When the selling price of the bond is less than the book value of the bond then there will be loss.
So correct answer is when the selling price of the bond differs from the book value(cost) of the bond.
What again or loss on the sale of a bond investment? When the selling company negotiates...
Accounting for Debt Securities—Available-for-Sale Hilo Company had the following transactions and adjustments related to a bond investment: 2019 Jan. 1 Purchased $800,000 face value of Cynad, Inc.’s 9 percent bonds at 99 plus a brokerage commission of $1,400. The bonds pay interest on June 30 and December 31 and mature in 20 years. Hilo does not expect to sell the bonds in the near future, nor does it intend to hold the bonds to maturity. June 30 Received the semiannual...
Accounts Available:
Accumulated Other Comprehensive Income
Allowance for Investment Impairment
Bond Investment at Amortized Cost
Cash
Dividend Receivable
Dividend Revenue
FV-NI Investments
FV-OCI Investments
Gain on Sale of Investments
GST Receivable
Interest Expense
Interest Income
Interest Payable
Interest Receivable
Investment in Associate
Investment Income or Loss
Loss on Discontinued Operations
Loss on Impairment
Loss on Sale of Investments
No Entry
Note Investment at Amortized Cost
Other Investments
Recovery of Loss from Impairment
Retained Earnings
Unrealized Gain or Loss - OCI...
When a company purchases a bond with face amount $1,000, it may pay more or less than $1,000. Explain why the price can be different from the face amount and what is a premium or discount. By the time the bond matures, the company is paid back $1,000. Explain how the premium (or discount) is amortized. Identify and explain the three types of classifications for investments in debt securities. How unrealized holding gains and losses should be reported for each?...
Accounting for Debt Securities–Available-for-Sale Hilyn Company had the following transactions and adjustments related to a bond investment: 2016 Jan. Purchased $800,000 face value of Cynad, Inc.'s 9 percent bonds at 99 plus a brokerage commission of $1,400. The bonds pay interest on June 30 and December 31 and mature in 15 years. Hilyn does 1 not expect to sell the bonds in the near future, nor does it intend to hold the bonds to maturity. June 30 Received the semiannual...
Question 4 When a bond is sold at a discount how is the difference between the bonds sale price and its face value? Not yet answered Marked out of 1.00 Flag question Select one: a. a credit to bond payable expense b. a credit to discounts on bond payable c. a debit to bond payable expense O d. a debit to discounts on bonds payable Question 5 Not yet answered What does the method of acquiring the patent affect? Select...
Question 4 When a bond is sold at a discount how is the difference between the bonds sale price and its face value? Not yet answered Marked out of 1.00 Flag question Select one: a. a credit to bond payable expense b. a credit to discounts on bond payable c. a debit to bond payable expense O d. a debit to discounts on bonds payable Question 5 Not yet answered What does the method of acquiring the patent affect? Select...
Computing Depreciation, Asset Book Value, and Gain or Loss on Asset Sale Palepu Company owns and operates a delivery van that originally cost $27,200. Straight-line depreciation on the van has been recorded for three years, with a $2,000 expected salvage value at the end of its estimated six-year useful life. Depreciation was last recorded at the end of the third year, at which time Palepu disposes of this van. a. Compute the net book value of the van on the...
Your answer is partially correct. Try again. Concord Company has an investment in 7%, 13-year bonds of Soto Company. The investment was originally purchased at par for $280 in 2016 and it is accounted for at amortized cost. Early in 2017, Concord recorded an impairment on the Soto investment due to Soto's financial distress. At that time, the present value of the cash flows discounted using the original effective interest rate was $252, and the present value of the cash...
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Selling Stocks When you sell your stocks, the sale can result in either a profit or a loss. You profit when the sale amoun minus the sales commission is greater than the original purchase amount. Your sale results in a loss when the sale amount minus the sales commission is less than the original purchase amount NET SALE - AMOUNT OF SALE COMMISSION PROFIT - NET SALE TOTAL PAID LOSS - TOTAL PAID...
Incorrect answer. Your answer is incorrect. Try again. Eckert Company is involved in producing and selling high-end golf equipment. The company has recently been involved in developing various types of laser guns to measure yardages on the golf course. One small laser gun, called LittleLaser, appears to have a very large potential market. Because of competition, Eckert does not believe that it can charge more than $90 for LittleLaser. At this price, Eckert believes it can sell 100,000 of these...