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    To Record Issuance at FV Option: 2024 Meriel Co

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    keithchristian.reyes

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    To Record Issuance at FV Option: 2024 Meriel Co

    Uploaded by

    keithchristian.reyes
    3 views1 page

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    P4

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    3 views1 page

    To Record Issuance at FV Option: 2024 Meriel Co

    Uploaded by

    keithchristian.reyes

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 1

    JOURNAL ENTRIES COMPUTATIONS

    DATE ACCOUNT TITLE & EXPLANATION DEBIT CREDIT


    2024 MERIEL CO
    1-Jan Cash 3,880,000 Face Amount 4,000,000
    Bonds Payable - FV 3,880,000 Issue Cost 97
    To record issuance @ FV option Issue Price 3,880,000

    1-Jan Bond Issue Cost 70,000


    Cash 70,000 Face Amount 4,000,000
    To record pament of bond issue cost Nominal Rate 9%
    Interest Expense 360,000
    31-Dec Interest Expense 360,000
    Cash 360,000 Initial Carrying Amount 3,880,000
    To record payment of interest Fair Value @ Dec 31, 2024
    Face Amount 4,000,000
    31-Dec Loss on credit risk - OCI 80,000 Fair Value 101 4,040,000
    Loss from change in FV 80,000 LOSS on change in FV (160,000)
    Bonds Payable - FV 160,000 Loss attributable to CREDIT RISK (OCI) (80,000)
    To record increase in FV Loss - Market Interest Rate (P/L) (80,000)

    2025 MARIEL CO Carrying Amount - Dec 31, 2024 4,040,000


    31-Dec Interest Expense 360,000 Fair Value @ Dec 31, 2025
    Cash 360,000 Face Amount 4,000,000
    To record payment of interest Fair Value 98 3,920,000
    GAIN from change in FV 120,000
    31-Dec Bonds Payable - FV 120,000 Gain attributable to CREDIT RISK (OCI) 60,000
    GAIN from change in FV 60,000 Gain - Market Interest Rate (P/L) 60,000
    GAIN on credit risk - OCI 60,000
    To record decrease in FV Settlement Price 99 3,960,000
    Carrying Amount - Dec 31, 2025 3,920,000
    2026 Loss on settlement 40,000
    30-Jun Bonds Payable - FV 3,920,000
    Interest Expense 180,000 Settlement Price 3,960,000
    Loss on settlement of BP 40,000 Interest Expense 180,000
    Cash 4,140,000 Total Cash Payment 4,140,000
    To record settlement
    OCI - RESERVE
    30-Jun Retained Earnings 20,000 Loss on credit risk - OCI Dec 31, 2024 80,000
    LOSS on credit risk - OCI 20,000 GAIN on credit risk - OCI 60,000
    To record reclassification NET LOSS on credit risk - OCI - Dec 31, 2025 (20,000)

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