1. Problem -A company acquired bonds at a certain amount plus accrued interest. Interest is paid each twice a year. The bonds will be added to the company's available-for-sale portfolio. What is the amount to record as the cost of this debt investment?
2. Problem - A company acquired bonds. The bonds mature at a future date and interest is payable twice a year. There is a discount with an effective yield. The company uses the effective-interest method and plans to hold these bonds to maturity. How much should the company increase its Debt Investments account for these bonds?
3. Problem - A Company's trading securities portfolio, which is appropriately included in current assets, 2 companies with cost and fair value amounts. Ignoring income taxes, what amount should be reported as a charge against income in the income statement if the company is in the first year of operations?
4. Problem - Company A owns outstanding shares of company B. During the year, company B earns a certain amount and pays cash dividends of a certain amount. What amount should company A show in the investment account at December 31, if the beginning of the year balance in the account was a certain amount?