20. An investor purchased a bond classified as a long-term investment between interest dates at a discount. At the purchase date, the carrying amount of the bond is more than the
21. On January 1, year 1, Korn Co. sold to Kay Corp. $ 400,000 of its 10 % bonds for $ 354,118 to yield 12 %. Interest is payable semiannually on January 1 and July 1. What amount should Korn report as interest expense for the 6 months ended June 30, year 1?
22. Bryce Corp. signed an agreement with Casey, which requires that if Casey does not meet certain contractual obligations, Casey must forfeit land worth $ 100,000 to Bryce. Bryce’ s accountants believe that Casey will not meet its contractual obligations, and it is probable Bryce will receive the land by the end of year 3. Bryce uses IFRS for reporting purposes. How should Bryce report the land in its December 31, year 2 financial statements?
23. On March 1, year 1, Cain Corp. issued at 103 plus accrued interest 200 of its 9 %, $ 1,000 bonds. The bonds are dated January 1, year 1, and mature on January 1, year 11. Interest is payable semiannually on January 1 and July 1. Cain paid bond issue costs of $ 10,000. Cain should realize net cash receipts from the bond issuance of
24. On April 1, year 1, Girard Corporation issued at 98 plus accrued interest, 200 of its 10 %, $ 1,000 bonds. The bonds are dated January 1, year 1, and mature on January 1, year 11. Interest is payable semiannually on January 1 and July 1. From the bond issuance Girard would realize net cash receipts of
25. Bell Co. is a defendant in a lawsuit that could result in a large payment to the plaintiff. Bell’ s attorney believes that there is a 90 % chance that Bell will lose the suit, and estimates that the loss will be anywhere from $ 5,000,000 to $ 20,000,000 and possibly as much as $ 30,000,000. None of the estimates are better than the others. What amount of liability should Bell report on its balance sheet related to the lawsuit?