IFA43 – Debt Investments: Held-to-Maturity (Amortized Cost) – Intermediate Accounting

Download the Workbook: http://www.tonybell.com Unlock 100+ Members Accounting Tutorials: https://www.youtube.com/channel/UCNFClg6mzfZ5ixpuH9c7f1A/join In This Video: We work through Problem 9-1A, focusing on the accounting treatment for Debt Investments classified as Held-to-Maturity (or Amortized Cost). Using a scenario where Kamloops Corp. purchases 3-year bonds from Global Inc. at a discount, we build a complete investment amortization schedule using the effective interest method. We walk through the journal entries required for the initial purchase on January 1, the annual interest payments, the amortization of the discount, and the final redemption at maturity. Finally, we tackle a bonus question to prove the initial $97,327 purchase price by manually recalculating the present value of the bond's future cash flows. Module Overview (IFA42–IFA47): This module explores the accounting treatment for Investments. We will dive into the specific rules for debt securities (including Amortized Cost, Fair Value Through Net Income, and Fair Value Through Other Comprehensive Income), as well as the different levels of influence and corresponding accounting methods for equity securities (Fair Value, the Equity Method, and Consolidation).