ACCT 551 help A Guide to career/uophelp.com ACCT 551 help A Guide to career/uophelp.com | 页面 20

Question 5. (TCO D) Hurst, Inc. sold its 8% bonds with a maturity
value of $3,000,000 on August 1, 2009 for $2,946,000. At the time of
the sale, the bonds had 5 years until they reached maturity. Interest on
the bonds is payable semiannually on August 1 and February 1. The
bonds are callable at 104 at any time after August 1, 2011. By October 1,
2011, the market rate of interest has declined and the market price of
Hurst’s bonds has risen to a price of 101. The firm decides to refund the
bonds by selling a new 6% bond issue to mature in 5 years. Hurst begins
to reacquire its 8% bonds in the market and is able to purchase $500,000
worth at 101. The remainder of the outstanding bonds is reacquired by
exercising the bonds’ call feature. In the final analysis, how much was
the gain or loss experienced by Hurst in reacquiring its 8% bonds?
(Assume the firm used straight-line amortization.) Show calculations.
-------------------------------------------------------------------------------
ACCT 551 Midterm Exam Set 2
For more course tutorials visit
www.uophelp.com
Question 1. (TCO C) The major problem of accounting for intangibles is
determining