[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

[Anonymous]

Im confused on notes and bonds,

So I know that principal payments reduce note payable but do they reduce carrying value as well? I thought carrying value is only affected by discount and premium amortization, right?

[Anonymous]

Im confused on notes and bonds,

So I know that principal payments reduce note payable but do they reduce carrying value as well? I thought carrying value is only affected by discount and premium amortization, right?

[Anonymous]

@cpa066729:

So…here's my go at an explanation:

when you have an annuity due situation, the first payment towards the bond is 100% reduction in principal or face and thus also the CV because the CV = face + premium or – discount. Every other payment thereafter is partial interest expense and partial amortization of premium or discount, which also affects the CV.

I hope this helps 🙂

[Anonymous]

@cpa066729:

So…here's my go at an explanation:

when you have an annuity due situation, the first payment towards the bond is 100% reduction in principal or face and thus also the CV because the CV = face + premium or – discount. Every other payment thereafter is partial interest expense and partial amortization of premium or discount, which also affects the CV.

I hope this helps 🙂

[Anonymous]

Oh thanks, I had some questions in my practice where they had annual principal payments in addition to interest. So for those principal payment, they only affect the note payable and the discount and premium amortization are added/subtracted from the carrying book value?

[Anonymous]

Oh thanks, I had some questions in my practice where they had annual principal payments in addition to interest. So for those principal payment, they only affect the note payable and the discount and premium amortization are added/subtracted from the carrying book value?

[jeff]

NINJA Greg – FAR exam coming up

https://www.another71.com/ninja-cpa-blogger-greg-10/

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

[jeff]

NINJA Greg – FAR exam coming up

https://www.another71.com/ninja-cpa-blogger-greg-10/

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

[kels417]

Hey guys, quick question on transactions lacking commercial substance that contain boot.

Becker has me a bit confused. In order to determine if boot is less than or greater than 25% of total consideration, do you calculate boot over the fv of asset given? Or boot over the fv of asset received? I ask because I thought it was fv boot received, however in the book (p F2-39 from 2012) they show boots percentage being calculated as (2500/12000) which is the fv of the machine given. However, in the explanation on the previous page of recognizing a gain proportionally, it says “…is less than 25% of the total considerations received…”

Any help? Is it in fact fv of asset given?

Thanks so much! Exam is Thursday. So super nervous!

Illinois
Becker self study | Becker flashcards | Gleim | self written notes | WTB

AUD - 74, 75 Passed! (Expires 1/2/2014)
BEC - 78 Passed! (Expires 2/6/2014)
REG - 70, 70, 72, 74, 76 Passed!!
FAR - 72, 66, 69, 67

[kels417]

Hey guys, quick question on transactions lacking commercial substance that contain boot.

Becker has me a bit confused. In order to determine if boot is less than or greater than 25% of total consideration, do you calculate boot over the fv of asset given? Or boot over the fv of asset received? I ask because I thought it was fv boot received, however in the book (p F2-39 from 2012) they show boots percentage being calculated as (2500/12000) which is the fv of the machine given. However, in the explanation on the previous page of recognizing a gain proportionally, it says “…is less than 25% of the total considerations received…”

Any help? Is it in fact fv of asset given?

Thanks so much! Exam is Thursday. So super nervous!

Illinois
Becker self study | Becker flashcards | Gleim | self written notes | WTB

AUD - 74, 75 Passed! (Expires 1/2/2014)
BEC - 78 Passed! (Expires 2/6/2014)
REG - 70, 70, 72, 74, 76 Passed!!
FAR - 72, 66, 69, 67

[Anonymous]

@kels417: the FV of the assets given = FV assets received

[Anonymous]

@kels417: the FV of the assets given = FV assets received

[kels417]

@cpa4birthdaypresent – ahhhh! Yes! I do remember reading that somewhere as well. Thank you for the reminder!

Illinois
Becker self study | Becker flashcards | Gleim | self written notes | WTB

AUD - 74, 75 Passed! (Expires 1/2/2014)
BEC - 78 Passed! (Expires 2/6/2014)
REG - 70, 70, 72, 74, 76 Passed!!
FAR - 72, 66, 69, 67

[kels417]

@cpa4birthdaypresent – ahhhh! Yes! I do remember reading that somewhere as well. Thank you for the reminder!

Illinois
Becker self study | Becker flashcards | Gleim | self written notes | WTB

AUD - 74, 75 Passed! (Expires 1/2/2014)
BEC - 78 Passed! (Expires 2/6/2014)
REG - 70, 70, 72, 74, 76 Passed!!
FAR - 72, 66, 69, 67

[Anonymous]

@kels417:

my exam experience has been posted in the respective thread…good luck with your exam 🙂

[Author]

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