Asked by Radhika Singh on Jun 19, 2024
Verified
On January 1, 2010, the Wender Company acquired 12% bonds with a face value of $250, 000 and classified as held to maturity.The bonds pay interest on June 30 and December 31, and mature on December 31, 2019.
Required:
Held To Maturity
A classification for debt securities which an investor intends and is able to hold until maturity, recognizing interest income over the term.
Face Value
The nominal or dollar value printed on a security or instrument, such as a bond or stock, representing its legal value.
Interest
The cost of borrowing money, typically expressed as an annual percentage of the loan or deposit amount.
- Acquire expertise in utilizing the effective interest method for bond investments and grasp the concepts of recognizing interest income and the process of amortization.
Verified Answer
HC
horace codjiaJun 19, 2024
Final Answer : 
1 $250,000′0.12′6/12 \$ 250,000 ^\prime0.12 ^\prime 6 / 12 $250,000′0.12′6/12
2 Previous carrying value ' 0.14 '6/12
3 Amount from footnote b - Amount from footnote
4 Previous carrying value + Amount from footnote c
1 $250,000′0.12′6/12 \$ 250,000 ^\prime0.12 ^\prime 6 / 12 $250,000′0.12′6/12 2 Previous carrying value ' 0.14 '6/12
3 Amount from footnote b - Amount from footnote
4 Previous carrying value + Amount from footnote c
Learning Objectives
- Acquire expertise in utilizing the effective interest method for bond investments and grasp the concepts of recognizing interest income and the process of amortization.