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    Shane Company

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    Rhitzelynn Ann Barredo
    The document outlines financial details of bond issuances and holdings for three companies: 1) Shane Company issued $5.5 million in bonds at 110% of par value, receiving $5.45 million in net cash after costs. 2) Carol Company issued $5 million in bonds at 102% of par value, recording a $5.075 million bond liability after premium and costs. 3) Carmina Company held $5 million bonds paying 6% interest. The carrying amount decreased by $260,000 from 2020 to 2021, representing a gain from the change in fair value.

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    Shane Company

    Uploaded by

    Rhitzelynn Ann Barredo
    415 views1 page
    The document outlines financial details of bond issuances and holdings for three companies: 1) Shane Company issued $5.5 million in bonds at 110% of par value, receiving $5.45 million in net cash after costs. 2) Carol Company issued $5 million in bonds at 102% of par value, recording a $5.075 million bond liability after premium and costs. 3) Carmina Company held $5 million bonds paying 6% interest. The carrying amount decreased by $260,000 from 2020 to 2021, representing a gain from the change in fair value.

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    The document outlines financial details of bond issuances and holdings for three companies: 1) Shane Company issued $5.5 million in bonds at 110% of par value, receiving $5.45 million in net cash after costs. 2) Carol Company issued $5 million in bonds at 102% of par value, recording a $5.075 million bond liability after premium and costs. 3) Carmina Company held $5 million bonds paying 6% interest. The carrying amount decreased by $260,000 from 2020 to 2021, representing a gain from the change in fair value.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    415 views1 page

    Shane Company

    Uploaded by

    Rhitzelynn Ann Barredo
    The document outlines financial details of bond issuances and holdings for three companies: 1) Shane Company issued $5.5 million in bonds at 110% of par value, receiving $5.45 million in net cash after costs. 2) Carol Company issued $5 million in bonds at 102% of par value, recording a $5.075 million bond liability after premium and costs. 3) Carmina Company held $5 million bonds paying 6% interest. The carrying amount decreased by $260,000 from 2020 to 2021, representing a gain from the change in fair value.

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    Shane Company

    1. Issue price (5,000,000 x 110) 5,500,000


    Accrued interest from July to October 1, 2020 (5,500,000 x 12% x 3/12)
    150,000
    Total 5,650,000
    Less: Bond issue cost 220,000
    Net cash received 5,450,000 (A)

    Carol Company

    1. Bond Payable 5,000,000


    Premium on bond payable 200,000
    Bond issue cost
    (125,000)
    Bond Liability 5,075,000 (B)

    Carmina Company

    1. Nominal Interest (5,000,000 x 127) 600,000

    2. Carrying amount -1/1/2020 5,385,000


    Carrying amount-12/31/2020 5,125,000
    Decrease in Liability-gain 260,000 (B)

    3. P5,125,00 (B)

    4. Cash 5,385,000
    Bonds payable 5,385,000
    #
    Interest Expense 600,000
    Cash 600,000
    #
    Interest Expense 300,000
    Cash 300,000
    #
    Bonds payable 260,000
    Gain on change in fair value 260,000

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