Homework Session 10

Petunjuk:
 Kerjakan soal secara individu dengan tulis tangan di kertas.
 Jawaban dikumpulkan pada hari Senin, 20 Nopember 2023 di kelas s.d jam 14.15 WIB.
Pengumpulan terlambat tidak diterima.

Soal 1
On January 1, 2022, Jungle Company purchased 12% bonds having a maturity value of $1,000,000.
The bonds provide the bondholders with a 10% effective yield. They are dated January 1, 2022, and
mature January 1, 2027, with interest received December 31 of each year. Fair value of bonds on
December 31, 2022 was $1,050,000. Jungle’s business model is to hold these bonds to collect
contractual cash flows.

Instructions
a. Prepare schedule of interest revenue and bond discount/premium amortization.
b. Prepare all of the the journal entry related bonds investment during 2022.
c. If assuming Jungle has a strategy of held-for-collection and selling, prepare all of the the
journal entry related bonds investment during 2022.

Soal 2
Salty Corporation made the following cash investments during 2022, which is the first year in which
Salty invested in securities.
 On January 25, purchased 10,000 ordinary shares of Maxi Company at $35 per share plus a
commission of $1,900.
 On July 1, purchased 5,000 ordinary shares of Sweet Co. at $50 per share plus a commission
of $3,300.
 On September 20, Salty sold 3,000 shares of Maxi Company at a market price of $37 per
share less brokerage commissions, taxes, and fees of $2,800.
 On September 20, purchased 7,000 ordinary shares of Brown Co. at $20 per share plus a
commission of $4,000.

The year-end fair values per share were Maxi $30, Sweet $55, and Brown $23. In addition, Salty
Corporation plans to actively trade these investments.

Instructions:
Prepare the journal entries to record all of transactions at Salty related the ordinary shares
investment.

Soal 3
Pinky Corp acquired 20% of the outstanding ordinary shares of Blank Ltd. on January 1, 2022. The
purchase price was $150,000,000 for 100,000 shares. Blank declared and paid an $70 per share cash
dividend on April 30 and on Oktober 31, 2022. Blank reported net income of $180,000,000 for 2022.
The fair value of Blank’s shares was $1,400 per share at December 31, 2022.

Instructions
a. Prepare the journal entries for Pinky for 2022, assuming that Pinky cannot exercise significant
influence over Blank. The investments should be classified as FVOCI.
b. Prepare the journal entries for Pinky for 2022, assuming that Pinky can exercise significant
influence over Blank.
c. At what amount is the investment reported on the statement of financial position based on each
point (a) and (b) at December 31, 2022? What is the effect on net income reported in 2023 based
on each (a) and (b).

Soal 4
On January 1, 2022, Sunny (a lessee) enters into an agreement with Rain (a lessor) to lease a
machine for 5 years. The terms of the lease called for Sunny to make annual payments of $8,668 at
the beginning of each year, starting January 1, 2022. The machine has an estimated useful life of 6
years and a $5,000 unguaranteed residual value. The machine reverts back to Rain at the end of the
lease term. Sunny and Rain use the straight-line method of depreciation for all of its plant assets.
Sunny’s incremental borrowing rate is 5%. Rain’s implicit rate is 6%, but it is unknown by Sunny.

Instructions:
a. What is the present value of the lease payments to determine the lease liability?
b. Prepare all necessary journal entries for Sunny for this lease since January 1, 2022 through
January 1, 2023.

Soal 5
Pony plc leases a building to Little Ltd. on January 1, 2022. The following facts pertain to the lease
agreement:
1. The lease term is 5 years, with equal annual rental payments of $4,703 at the beginning of
each year.
2. Ownership does not transfer at the end of the lease term, there is no bargain purchase
option, and the asset is not of a specialized nature.
3. The building has a fair value of $23,000, a book value to Pony of $16,000, and a useful life of
6 years.
4. At the end of the lease term, Pony and Little expect there to be an unguaranteed residual
value of $4,000.
5. Pony wants to earn a return of 8% on the lease, and collectibility of the payments is
probable. This rate is known by Little.

Instructions:
a. How would Pony (lessor) classify this lease? How would Pony initially measure the lease
receivable, and how would Little initially measure the lease liability and right-of-use asset?
b. Using the original facts of the lease, show the journal entries to be made by both Pony and
Little in 2022.
c. Suppose the entire expected residual value of $4,000 is guaranteed by Walsh. How will this
change your answer to part (a) and (b)

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