Differentiаte. Shоw аll wоrk оn scrаp paper for full credit.y = 4ex2
Anаlyzing аnd Repоrting Finаncial Statement Effects оf Bоnd Transactions (FSET) On January 1, Trueman Corp. issued $400,000 of 20-year, 11% bonds for $369,907, yielding a market ( yield) rate of 12%. Interest is payable semiannually on June 30 and December 31. a. Confirm the bond issue price. Present value of principal repayment ${#1} Present value of interest payments ${#2} Selling price of bonds b. Record the bond issuance, semiannual interest payment, and discount amortization on June 30, and semiannual interest payment and discount amortization on December 31, using the financial statement effects template. Use the effective interest rate method. ● Note: Use negative signs with your answers, when appropriate. ● Note: Select "N/A" as your answer if a part of the accounting equation is not affected. ● Note: Round your answers to the nearest whole dollar. Balance Sheet Income Statement Cash Noncash Contributed Earned Net Transaction Asset + Assets = Liabilities + Capital + Capital Revenue - Expenses = Income Jan. 1: Issue bonds. {#3} {#4} {#5} {#6} {#7} {#8} Bonds payable {#9} {#10} {#11} {#12} Jun. 30: Interest payment. {#13} {#14} {#15} {#16} {#17} {#18} {#19} {#20} {#21} Dec. 31: Interest payment. {#22} {#23} {#24} {#25} {#26} {#27} {#28} {#29} {#30} c. Trueman elected to report these bonds in its financial statements at fair value. On December 31, these bonds were listed in the bond market at a price of 101 (or 101% of par value). Using the financial statement effects template, record the entry to adjust the reported value of these bonds to fair value. Balance Sheet Income Statement Cash Noncash Contributed Earned Net Transaction Asset + Assets = Liabilities + Capital + Capital Revenue - Expenses = Income Adjust bond to fair value. {#31} {#32} {#33} {#34} {#35} {#36} {#37} {#38} {#39} {#40} {#41} d. Prepare a table summarizing the effect of these bonds on earnings for the year. ● Note: Do not use negative signs with any of your answers. Effect on bond Amount Coupon payments ${#42} Discount amortization {#43} Total interest expense {#44} Fair value adjustment {#45} Total effect on income (deduction)