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Accounting arrow ACC 306 Week 2 P14-21 Appling Enterprises


ACC 306 Week 2 P14-21 Appling Enterprises

ACC 306 Week 2 P14-21 Appling Enterprises

Price: $15.00


ACC 306 Week 2 P14-21 Appling Enterprises

Appling Enterprises issued 8% bonds with a face amount of $400,000 on January 1, 2011. The bonds sold for $331,364 and mature in 2030 (20 years). For bonds of similar risk and maturity the market yield was 10%. Interest is paid semiannually on June 30 and December 31. Appling determines interest expense at the effective rate. Appling elected the option to report these bonds at their fair value. The fair values of the bonds at the end of each quarter during 2011 as determined by their market values in the over-the-counter market were the following:
March 31     $ 350,000
June 30        340,000
September 30        335,000
December 31       342,000
Required:
1.     By how much will Appling’s earnings be increased or decreased by the bonds (ignoring taxes) in the March31 quarterly financial statements?
2.    By how much will Appling’s earnings be increased or decreased by the bonds (ignoring taxes) in the June 30 quarterly financial statements?
3.    By how much will Appling’s earnings be increased or decreased by the bonds (ignoring taxes) in the September 30 quarterly financial statements?
4.    By how much will Appling’s earnings be increased or decreased by the bonds (ignoring taxes) in the December 31 annual financial statements?







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