[jeff]

FAR Resources:

Free FAR Notes & Audio – https://www.another71.com/cpa-exam-study-plan

FAR 10 Point Combo: https://www.another71.com/products-page/ten-point-combo

FAR Score Release: https://www.another71.com/cpa-exam-scores-results-release

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[smsingla]

Thnks Jeff

REG 81
BEC 74,65,78
FAR 79
AUD 85 DONE!!!

[smsingla]

Thnks Jeff

REG 81
BEC 74,65,78
FAR 79
AUD 85 DONE!!!

[samdiegoCPA]

I haz no brainz.

/dead

AUD: 84
REG: 84
BEC: 79
FAR: 83

[samdiegoCPA]

I haz no brainz.

/dead

AUD: 84
REG: 84
BEC: 79
FAR: 83

[smsingla]

WTF??? I m doing pensions for the second time (first time was like a month ago) and it feels like this is some different language. Donno what to do?

REG 81
BEC 74,65,78
FAR 79
AUD 85 DONE!!!

[smsingla]

WTF??? I m doing pensions for the second time (first time was like a month ago) and it feels like this is some different language. Donno what to do?

REG 81
BEC 74,65,78
FAR 79
AUD 85 DONE!!!

[Anonymous]

On December 30, Year 1, Fort, Inc. issued 1,000 of its 8%, 10-year, $1,000 face value bonds with detachable stock warrants at par. Each bond carried a detachable warrant for one share of Fort's common stock at a specified option price of $25 per share. Immediately after issuance, the market value of the bonds without the warrants was $1,080,000 and the market value of the warrants was $120,000. In its December 31, Year 1, balance sheet, what amount should Fort report as bonds payable?

a. $1,000,000

b. $880,000

c. $900,000

d. $975,000

Explanation

Choice “c” is correct. The net bonds payable is $1,000,000 less $100,000 or $900,000. The issuance of bonds with detachable stock warrants would be recorded as:

Debit (Dr) Credit (Cr)

Cash $ 1,000,000

Discount 100,000

Paid-in-capital, warrants* $ 100,000

Bonds payable 1,000,000

Can someone please explain why the answer isn't “A”?

Please and Thank you!

[Anonymous]

On December 30, Year 1, Fort, Inc. issued 1,000 of its 8%, 10-year, $1,000 face value bonds with detachable stock warrants at par. Each bond carried a detachable warrant for one share of Fort's common stock at a specified option price of $25 per share. Immediately after issuance, the market value of the bonds without the warrants was $1,080,000 and the market value of the warrants was $120,000. In its December 31, Year 1, balance sheet, what amount should Fort report as bonds payable?

a. $1,000,000

b. $880,000

c. $900,000

d. $975,000

Explanation

Choice “c” is correct. The net bonds payable is $1,000,000 less $100,000 or $900,000. The issuance of bonds with detachable stock warrants would be recorded as:

Debit (Dr) Credit (Cr)

Cash $ 1,000,000

Discount 100,000

Paid-in-capital, warrants* $ 100,000

Bonds payable 1,000,000

Can someone please explain why the answer isn't “A”?

Please and Thank you!

[Anonymous]

On June 2, Year 1, Tory, Inc. issued $500,000 of 10%, 15-year bonds at par. Interest is payable semiannually on June 1 and December 1. Bond issue costs were $6,000. On June 2, Year 6, Tory retired half of the bonds at 98. What is the net amount that Tory should use in computing the gain or loss on retirement of debt?

a. $247,000

b. $248,000

c. $248,500

d. $249,000

Explanation

Choice “b” is correct. The amount used to compute a gain or loss on bond retirement is the carrying amount of the bond and the pro rata portion of bond issue cost.

Original carrying amount $ 500,000

Bond issue cost ($6,000 x 10/15) (4,000)<

---

Where did the 10/15 come from?

Net carrying amount 6/2/Year 6 496,000

Portion retired x 50%

Amount used to compute gain/loss $ 248,000

Bonds will be the death of me.

[Anonymous]

On June 2, Year 1, Tory, Inc. issued $500,000 of 10%, 15-year bonds at par. Interest is payable semiannually on June 1 and December 1. Bond issue costs were $6,000. On June 2, Year 6, Tory retired half of the bonds at 98. What is the net amount that Tory should use in computing the gain or loss on retirement of debt?

a. $247,000

b. $248,000

c. $248,500

d. $249,000

Explanation

Choice “b” is correct. The amount used to compute a gain or loss on bond retirement is the carrying amount of the bond and the pro rata portion of bond issue cost.

Original carrying amount $ 500,000

Bond issue cost ($6,000 x 10/15) (4,000)<

---

Where did the 10/15 come from?

Net carrying amount 6/2/Year 6 496,000

Portion retired x 50%

Amount used to compute gain/loss $ 248,000

Bonds will be the death of me.

[HeartsMimiCPA]

@Donica 10/15 represents the unamortized amount of the bond issue costs

AUD - 65, 89!
REG - 70, 89!
FAR - 78!
BEC - 77!

Finally!
Experience 06/30/15
Ethics-Done

VA Licensed 09/15/15

[HeartsMimiCPA]

@Donica 10/15 represents the unamortized amount of the bond issue costs

AUD - 65, 89!
REG - 70, 89!
FAR - 78!
BEC - 77!

Finally!
Experience 06/30/15
Ethics-Done

VA Licensed 09/15/15

[HeartsMimiCPA]

For the other problem, I think because it's asking you for what Bonds Payable will be on your balance sheet, it has to be presented in net of the discount, not in the amount Credited in the transaction.

AUD - 65, 89!
REG - 70, 89!
FAR - 78!
BEC - 77!

Finally!
Experience 06/30/15
Ethics-Done

VA Licensed 09/15/15

[HeartsMimiCPA]

For the other problem, I think because it's asking you for what Bonds Payable will be on your balance sheet, it has to be presented in net of the discount, not in the amount Credited in the transaction.

AUD - 65, 89!
REG - 70, 89!
FAR - 78!
BEC - 77!

Finally!
Experience 06/30/15
Ethics-Done

VA Licensed 09/15/15

[lvr21]

@Donica — what does the BAE BAE stand for in your signature?? Did it come from Becker?? haha..

I took today off work so I can try to catch up … Here's to another ful day of FAR!

{R: PASSED!! (I passed one!)}
{B: PASSED!! (Halfway there!)}
{F: PASSED!! (1 left!!!)}
{A: PASSED(I am done!!)}

[Author]

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