Multiple Choice
Rick's Pawn Shop issued 11% bonds,dated January 1,with a face amount of $400,000 on January 1,2017.The bonds sold for $370,000.For bonds of similar risk and maturity the market yield was 12%.Interest is paid semiannually on June 30 and December 31.Rick's determines interest at the effective rate and elected the option to report these bonds at their fair value.On December 31,2017,the fair value of the bonds was $365,000,with $2,000 of the change due to a change in general interest rates.Rick's statement of comprehensive income will include:
A) An unrealized gain from change in the fair value of debt of $5,412.
B) An unrealized loss from change in the fair value of debt of $3,412.
C) An unrealized gain from change in the fair value of debt of $2,000.
D) An unrealized gain from change in the fair value of debt of $3,412.
Correct Answer:
Verified
Correct Answer:
Verified
Q92: On January 1, 2018, Morton Sales Co.
Q95: When the interest payment dates are March
Q101: Required: What will Morton Sales Co.report on
Q103: On March 1,2016,Doll Co.issued 10-year convertible bonds
Q104: Nickel Inc.bought $100,000 of 3-year,6% bonds as
Q105: What is the book value of the
Q107: On May 1,2016,Joe purchased $200,000 in zero-coupon
Q111: For the issuer of 20-year bonds,the amount
Q130: The specific provisions of a bond issue
Q227: The initial selling price of bonds represents