The following bond transactions occurred during the year of 2010 for Hanitron Ltd. (HL) and...

70.2K

Verified Solution

Question

Accounting

image
The following bond transactions occurred during the year of 2010 for Hanitron Ltd. (HL) and Koodeau Ltd. Both companies have a July 31 fiscal year end. Assume that both companies are public enterprises. Feb. 01 HL issued $10 million of five-year, 6% bonds at 101. The bonds pay interest semi-annually on August I and February 1. Feb. 01 Koodeau purchased $2 million of HL's bonds at 101. July 31 Both companies prepared entries to accrue the bond interest at year end. The semi-annual amortization amount was $8,110 on the full $10 million bond. July 31 The bonds were trading at 100 on this date Aug. 1 The semi-annual interest on the bonds was paid. Required: (NOTE that journal entries are NOT required to answer any of the following, but MAY be helpful in obtaining part marks. Journal entrics not marked. Use your judgment accordingly. a. Show how the bond liability and related accounts would be presented in HL's financial statements for the year ended July 31, 2010. (Use good format for all financial statements.) b. Show how the debt investment and related accounts would be presented in Koodeau' financial statements for the year ended July 31, 2010, assuming they purchased the bonds for the purpose of carning interest. c. Alternately, and entirely separate from the above, now assume the bonds were purchased for trading purposes by Koodcau. Show how the debt investment and related accounts would be presented in Koodeau's financial statements for the year ended July 31, 2010

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students