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ACYFAR 3 > NCL > Flashcards

NCL Flashcards

Master Bonds Payable's Treatment

1
Q

When the effective rate is higher than the stated/nominal rate, is this a discount or premium?

A

Discount

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2
Q

When the stated/nominal rate is higher than the effective rate, is this a discount or premium?

A

Premium

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3
Q

When the nominal rate and effective rate is available, what type of note is it?

A

Interest Bearing Note

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4
Q

When the effective rate is available but the nominal rate is not available, what type of note is it?

A

Non Interest Bearing Note

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5
Q

How do you identify an interest bearing note with realistic rate?

A

When effective rate = nominal rate

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6
Q

How do you identify an interest bearing note with unrealistic rate?

A

When effective rate is not = to nominal rate

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7
Q

What is the initial measurement of a realistic rate?

A

Face amount

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8
Q

What is the subsequent measurement of realistic rate?

A

Face amount

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9
Q

What is the initial measurement of an interest bearing note with unrealistic rate?

A

Present Value

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10
Q

What is the subsequent measurement of an unrealistic bearing note with unrealistic rate?

A

Amortized Cost

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11
Q

What is the initial measurement of a non-interest bearing note?

A

Present Value

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12
Q

What is the subsequent measurement of a non-interest bearing note?

A

Amortized Cost

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13
Q

What is the initial measurement of a Lump Sum note?

A

Principal = PVF1
Interest = PVOA

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14
Q

What are the situations where you have to deduct accrued interest from the retirement price to find G/L on acquisition of Bonds Payable?

A
  • If it is silent
  • If it says “including”
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15
Q

What are the situations where you do not have to deduct accrued interest from the retirement price to find G/L on acquisition of Bonds Payable?

A
  • Plus accrued interest
  • If it says “excluding”
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16
Q

What is the initial recognition for installments that are non-interest bearing?

A
  • PV the installments (just like how to solve for interests)
17
Q

TRUE OR FALSE:

You don’t include accrued interest when you pay the retirement price?

A

True

18
Q

How do you find the unamortized discount for the year?

A

Face Amount
Less: CA as of the year

19
Q

What is the treatment of bond issue costs when Fair Value option is not selected?

A

Deducted from Fair Value
(added to discount)
(deducted to premium)

20
Q

What is the treatment of bond issue costs when Fair Value option is not selected?

A

Deducted from Fair Value

21
Q

What is the treatment of bond issue costs when Fair Value option is selected?

A

Expense as incurred

22
Q

How do you solve for semi-annual interest paid?

A

Principal x NR x months/6

Note: You divide it by 6 and not by 12 if semi-annual/

23
Q

If the issue date is not the same as your sale date in bonds payable, how do you solve for the proceeds?

A

Fair Value (Initial Measurement if not given) + Accrued Interest

Accrued Interest = Interest Paid

24
Q

If the issue date is not the same as your sale date in bonds payable, how do you solve for the Initial Measurement?

A

CA, beg +- Amortization

25
Q

If an entity opts for the fair value option when it comes to bonds, what do you recognize when there is an increase in FV vs decrease in FV?

A

Increase = loss
Decrease = gain

Increase in FV will result in higher utang.

26
Q

What is the initial measurement of interest bearing with realistic rate?

A

Face Amount

27
Q

What is the subsequent measurement of interest bearing with realistic rate?

A

Face Amount

28
Q

What is the subsequent measurement of interest bearing with unrealistic rate?

A

Amortized Cost

29
Q

What is the initial measurement of interest bearing with unrealistic rate?

A

Present Value

30
Q

Are non-interest bearing notes recognized on a discount or premium?

A

Discount

31
Q

What is the initial measurement of non-interest bearing note?

A

Present Value

32
Q

What is the subsequent measurement of non-interest bearing note?

A

Amortized Cost

33
Q
A

ACYFAR 3 (9 decks)

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