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    Soledad Company Required1 Date Interest Received Interest Income Discount Amortization Carrying Amount

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    Anonn
    The document summarizes Soledad Company's investment in bonds over 3 years from 2020 to 2022. It shows the bonds' required interest rate of 8% to 10%, interest received, interest income, discount amortization, and carrying amount each year. In 2022, the bonds were reclassified to fair value through profit or loss due to a fair value of $2,845,000 compared to a carrying amount of -$3,347,592, resulting in a loss on reclassification of $502,592. Journal entries are provided to record the transactions each year.

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    Soledad Company Required1 Date Interest Received Interest Income Discount Amortization Carrying Amount

    Uploaded by

    Anonn
    290 views2 pages
    The document summarizes Soledad Company's investment in bonds over 3 years from 2020 to 2022. It shows the bonds' required interest rate of 8% to 10%, interest received, interest income, discount amortization, and carrying amount each year. In 2022, the bonds were reclassified to fair value through profit or loss due to a fair value of $2,845,000 compared to a carrying amount of -$3,347,592, resulting in a loss on reclassification of $502,592. Journal entries are provided to record the transactions each year.

    Original Description:

    Intermediate Accounting1

    Original Title

    21-3

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    The document summarizes Soledad Company's investment in bonds over 3 years from 2020 to 2022. It shows the bonds' required interest rate of 8% to 10%, interest received, interest income, discount amortization, and carrying amount each year. In 2022, the bonds were reclassified to fair value through profit or loss due to a fair value of $2,845,000 compared to a carrying amount of -$3,347,592, resulting in a loss on reclassification of $502,592. Journal entries are provided to record the transactions each year.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    290 views2 pages

    Soledad Company Required1 Date Interest Received Interest Income Discount Amortization Carrying Amount

    Uploaded by

    Anonn
    The document summarizes Soledad Company's investment in bonds over 3 years from 2020 to 2022. It shows the bonds' required interest rate of 8% to 10%, interest received, interest income, discount amortization, and carrying amount each year. In 2022, the bonds were reclassified to fair value through profit or loss due to a fair value of $2,845,000 compared to a carrying amount of -$3,347,592, resulting in a loss on reclassification of $502,592. Journal entries are provided to record the transactions each year.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 2

    Soledad Company

    Required1 8% 10%
    Date Interest received Interest income Discount amortization Carrying amount
    1/1/2020
    12/31/2020 300,000 272,400 27,600
    12/31/2021 300,000 270,192 29,808

    Required2
    Fair value - January 1, 2022 2,845,000
    Carrying amount per table January 1, 2022 -3,347,592
    Loss on reclassification -502,592
    Required3 Debit Credit
    Carrying amount 2020
    3,405,000 Jan-01 Investment in bonds 3,405,000
    3,377,400 Cash 3,405,000
    3,347,592
    Dec-31 Cash 300,000
    Interest income 300,000

    31 Interest income 27,600


    Investment in bonds 27,600

    2021
    Dec-31 Cash 300,000
    Interest income 300,000

    31 Interest income 29,808


    Investment in bonds 29,808

    2022
    Jan-01 Loss on reclassification 502,592
    Investment in bonds 502,592

    1 Financial asset-FVPL 2,845,000


    Investment in bonds 2,845,000

    Dec-31 Cash 300,000


    Interest income 300,000

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