Izza Zahratunnisa

Intermediate Accounting II 2020 IUP

19/438318/EK/22150

Assignment 3
E17-3:

a.

January 1 2019

Debt investments 322,744.44

Cash 322,744.44

b.
Schedule of Interest Revenue and Bond Premium Amortisation
Effective-Interest Method
12% Bonds Sold to Yield 10%

Date Cash Received Interest Revenue Premium Carrying Amount of

Amortised Bonds

1/1/19 - - - $322,744.44

1/1/20 $36,000 $32,274.44 $3,725.56 319,018.88

1/1/21 $36,000 31,901.89 4,098.11 314,920.77

1/1/22 $36,000 31,492.08 4,507.92 310,412.85

1/1/23 $36,000 31,041.29 4,958.71 305,454.14

1/1/24 $36,000 30,545.86 5,454.14 300,000.00

c.

December 21, 2019

Interest Receivables 36,000

Debt investments 3,725.56

Interest Revenue 32,274.44

d.

December 31, 2020

Interest Receivables 36,000

Debt investments 4,098.11

Interest Revenue 31,901.89

Izza Zahratunnisa
Intermediate Accounting II 2020 IUP
19/438318/EK/22150

E17-4:

a.

January 1, 2019

Debt investments 322,744.44

Cash 322,744.44

b.

December 31, 2019

Interest Receivables 36,000

Debt investments 3,725.56

Interest revenue 32,724.44

Fair value adjustments 1,481.12

Held gain or loss — Equity 1,481.12

c.

December 31, 2020

Held gain or loss — Equity 7,401.89

Fair value adjustment 7,401.89

Amortised Cost Fair Value Unrealised Gain/Loss

Available-for-sale bonds $314,920.77 $309,000.00 $(5,920.77)

Previous fair value 1,481.12

adjustments (debit)

Fair value adjustment $(7,401.89)

(credit)