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##### Intermediate Accounting Questions

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Solution

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Intermediate Accounting Questions,Dear sir, I was looking through your answer and have a few questions. 1) For question 1 (Long term investments). How did you get $8350 and $108530 in part (i)? How did you get the numbers $6300, $121.17, $6000, and $421.17 in part (iii)? 2) For question 2 (Notes Receivable), how did you get $23,150 in part (i)?,Dear sir, I still have a few questions that I need clarification in. 1) For question 1 (Long term investments) part (iii), how did you get $6000? You used it in the January 1,2006 entry for 8% bonds A/c and also in calculating premium ob bond payable=6421-6000. Did you just use $100000*6%? Please explain. 2) For question 1 (Long term investments), why are you using face value of $1000? Shouldn't it be $100,000? I am using the business/financial calculator sharp EL-738. I used PMT=100000*(8%/2)=-4000, i=6%/2=3%, n=5*2=10, and FV=-100,000, and got PV=108,530.20. Also how would I calculate the loss on sale of bond in part (iii) if I didn't use the face value of $1000? You divided by 1000 to get 6421. How would I get this amount using the financial calculator? Please explain. 3) For question 2 (Notes receivable), can you explain how to get the $23,150 amount using the financial calculator again? I am using BGN function, and i=9%, n=4, and PV=75000, but I am not getting PMT=23150? How do you get PMT=23150? Please explain. Thank you.

Paper#4419 | Written in 18-Jul-2015

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