- This topic has 2,502 replies, 106 voices, and was last updated 7 years, 1 month ago by mckan514w.
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December 19, 2016 at 6:26 pm #1396517
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December 19, 2016 at 10:45 pm #1396734Spartans92Participant
Wow Aren't I early for this Q.. haha. anyways does anyone have any good study tips with bonds? I watched the Demo video on ninja plus and Bob broke the topic down into an understandable way but then when I do becker's questions I dont even know where to begin… I dont got much time left and with 5 chaps to go Im frustrated… luckily govt and nfp won't take that long with the extended weekend/ holiday.
I appreciate the help if anyone can give me some tips to make this topic “click.”
Here's an example: On January 2, Year 1, West Co. issued 9% bonds in the amount of $500,000, which mature on January 2, Year 11. The bonds were issued for $469,500 to yield 10%. Interest is payable annually on December 31. West uses the effective interest method of amortizing bond discount. In its June 30, Year 1 balance sheet, what amount should West report as bonds payable?
a.
$500,000
b.
$471,025
c.
$470,475
d.
$469,500based on process of elimination I know A and D cannot be the answer. But I just dont know how to approach. Thanks guys!
BEC - 76
REG- 67, 85
AUD-63, 74, 80!!
FAR-65, 62, 57, 793 down 1 more to go. BEC is on the Line 🙁
BEC- PASS
December 19, 2016 at 11:35 pm #1396761A1lessioParticipantSpartans92- I also struggled with bonds and pretty much every other chapter. For bonds I kept re-watching the Becker lectures on my commute and writing out the section seems to really be helping me out. I went from scoring 30-40% on mcqs to 70-75%. For bonds make sure you fully understand discounts/ premium and start from there.
The first thing I noticed is that it was issued at a discount and we are using the effective interest method. Since your interest rate (9%) is lower than the market(10%) you have to sell it for cheaper because an investor buying the bonds will want the higher market rate. Notice west co is only receiving $469,500.
with a discount we add back the unamortized discounts to arrive at the face of the bond.
Calculate the interest:
Step 1: 469,500(bond issue price) x 10%(market rate) = 46,950
Step 2: 500,000 x 9%(stated rate) = 45,00046,950-45,000 = 1,950. Take half since it's the June 30th B/S date. We are left with $975. Since it's a discount we add the $975 back to the 469,500 to arrive at the face.
(c) 470,475AUD - 86
BEC - 70
FAR - 78
REG - 84People who subject themselves to the strictest discipline, who give up certain pleasurable things in order to obtain a goal are the happiest of men.AUD (08/02/2016)
December 20, 2016 at 12:50 am #1396793AnonymousInactiveMi amor joining the wagon!
I'm a repeater. I hate to join this thread (but I got no choice!) because I already passed FAR in 2014, bummer!
I must admit, when I began my repeat study in AUD in September, I kept looking back and feeling so bitter to ever repeat a section that I already passed. I scored a 75 in 2013 and I was scared that I would not have much luck this time and might fail miserably. But when I passed AUD again with a comfortable margin, I told myself, it wasn't that too bad to repeat an expired pass.Anyway guys, let's all do it together in this forum. We will conquer this beast!
@Spartan, check this bond thread I created almost 3 years ago. Hope this helps. I am also going to get some refresher of this info because I totally forgot FAR after struggling so bad with REG and BEC alternately.
December 20, 2016 at 6:47 am #1396829mckan514wParticipantAh its like homecoming in here 🙁 good to see you Spartan, A1 and AmorD…. good luck to all of us!
And they ask me why I drinkBEC 71, 82
AUD 75
REG 75
FAR 61, 69, 83and they ask me why I drink...
FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2December 20, 2016 at 7:22 am #1396835mtaylo24ParticipantI feel like I'm in a Q1 Summer school 😎
AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)December 20, 2016 at 9:06 am #1396886A1lessioParticipantmtaylo24 – how will you tackle FAR and BEC? Do you think we can get it done in Q1?
AUD - 86
BEC - 70
FAR - 78
REG - 84People who subject themselves to the strictest discipline, who give up certain pleasurable things in order to obtain a goal are the happiest of men.AUD (08/02/2016)
December 20, 2016 at 9:23 am #1396899sallybreannParticipantI take FAR January 9th. Started Studying November 10th and made it through the Becker material this weekend. I have never taken FAR before so I’m not sure if my study plan will work. But I plan to do 20 Non-Profit/Governmental MCQ’s each day because I had such a hard time learning it and don’t want to forget. Then will build on that and start reviewing other material (Starting right away with leases/bonds) and will re-review material for half of my study time each day and start review on a new topic the next. If anyone else is using Becker/NINJA MCQ’s and wants to swap study tips I’d love to hear what others are doing.
FAR - 82BEC - 74, 82
AUD - 78
REG - 80
December 20, 2016 at 10:04 am #1396943mtaylo24Participant@A1lessio, I really hope I can get them both done this window. I'm just glad that I'm only focusing on 2 this window, as I did 3 in both Q3 and Q4. I am still brainstorming on the timing, but as far as the strategy, I will primarily work with Gleim, then maybe switch to Ninja as time permits.
Weeks 1 – 3(or 4 or 5): Using Gleim, Read a study unit in its entirety, watch audiovisual lecture in its entirety , work all of the chapter MCQs start to finish. Re-work all questions for that chapter until I score at least 80%, then move on to the next chapter. Gleim has 20 subunits (but I'm attacking them based on where I think I need improvement, so I did Ch 18 (Gov't), Ch 15 (Business Combos), Ch 10 (Pensions/Benefits), and today I am working on Ch 9 (Intangibles/Franchise/Software/Prepayments). Sundays will be a refresher, a cumulative study day. This past Saturday, I dropped all of the JEs from the audiovisual lectures into a spreadsheet and converted to pdf. I plan to review these JEs often throughout the week.
Final 3 weeks (final review): Ninja MCQ, Gleim sims, re-reading of the text.
I am still working on the timing and squeezing BEC in, but I think I want to do FAR first since I'm really not connecting with this one.
CPA (2017)REG: 75
BEC: 76
FAR: 77
AUD: 78
CMA (2019)
P1: 380
P2: 360
AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)December 20, 2016 at 10:24 am #1396956AnonymousInactiveAnother way to approach this bond problem is to do the necessary journal entry. For me I always start from interest payable or in this case ‘accrued interest payable:
Accrued interest payable 6/12 x .09 x 500,000 = 22,500 (this represents the actual cash that will be paid)
Interest expense 6/12 x 469,500 (carrying amount) x .1 = 23,475
Discount amortization (to the balance sheet) is the difference between these two numbers – 975
Last step is to credit the bond carrying amount 469,500 by the 975 equaling 470,475
Also, need to remember:
Yield > Stated rate = Discount
Yield < Stated rate = Premium
December 20, 2016 at 10:30 am #1396971AnonymousInactiveOn topic: just did simulation 17 (Bonds) and scored horribly. The problem involved an investor buying a bond rather than a debtor issuing one.
Lesson learned (according to Ninja): if you are investing in bonds then there is not a separate bond premium or discount account, it is included in the bond investment account.
December 20, 2016 at 3:37 pm #1397316Spartans92ParticipantSo it has been a while since I last took FAR. Are the computations that long like Becker. I just did 1 question related to pension calculating the periodic pension cost and it took me 10 mins. Heres the question.. I got it right but its very time consuming.
Big Books, Inc. has the following information related to its defined benefit pension plan:December 31, Year 6:
Projected benefit obligation
$1,500,000
Fair value of plan assets
1,400,000
Unrecognized prior service cost
200,000
Unrecognized net transition asset
60,000
December 31, Year 7:
Projected benefit obligation
$1,740,000
Fair value of plan assets
1,670,000
Service cost
220,000
Assumptions:
Discount rate
6%
Expected return on plan assets
8%
Big Books makes an annual pension plan contribution of $200,000. The company's employees had an average remaining service life of 20 years on 12/31/Year 6. The company paid benefits of $70,000 in Year 7 and expects to pay benefits totaling $170,000 to retired employees in Year 8. Big Books has an effective tax rate of 30%. The actual return on plan assets was 10%. What would Big Books report as U.S. GAAP net periodic pension cost on its December 31, Year 7, income statement?
BEC - 76
REG- 67, 85
AUD-63, 74, 80!!
FAR-65, 62, 57, 793 down 1 more to go. BEC is on the Line 🙁
BEC- PASS
December 20, 2016 at 3:53 pm #1397339StilgoinParticipantHeyyyy. I swear – restudying seems so much harder than the first time. I am having trouble focusing on the work. I have time- I am lacking the will to get it done. Do I need a new test bank? The highest I have gotten on NINJA trending before an exam is 74. Should I stick with it or switch? Thoughts?
Stilgoin, CPAThere are enough critics. Be an encourager
B | 62, 78
A | 73, 67, 79
R | 82
F | 59, 59, WaitingEthics | 93
"Success is not final, failure is not fatal: it is the courage to continue that counts."
~Winston Churchill“In a world full of critics, be an encourager."
December 20, 2016 at 4:07 pm #1397354mckan514wParticipantwhen are you sitting Stilgoin? I ended up getting a new test bank- if for no other reason then I at least feel like I am not spinning my wheels with the same old stuff- call it a mental adjustment if you will. My advice would be if you think you have time to get the benefit of a new testbank do it- but if you are sitting early January then I would stick with the same old same old so you don't “muddle the brain” if you will 🙂 GOOD LUCK!
And they ask me why I drinkBEC 71, 82
AUD 75
REG 75
FAR 61, 69, 83and they ask me why I drink...
FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2December 20, 2016 at 4:12 pm #1397366mtaylo24Participant@stilgoin I vote to get a new TB. FOR FAR and BEC Ninja is a good final review tool, but isn't the best to learn on imho. I do however feel that the Ninja questions are completely necessary. Wiley is 150 and Gleim is 250, I think that you may be able to demo them before you buy. I'm personally going to save Ninja for my final review after I am feeling decent w/ Gleim.
CPA (2017)REG: 75
BEC: 76
FAR: 77
AUD: 78
CMA (2019)
P1: 380
P2: 360
AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)December 20, 2016 at 4:16 pm #1397367StilgoinParticipantJan 18- could push to Jan 30. I lose REG 31st 🙁 I think I am sticking with NINJA- I have never done MCQs to the extent of memorizing them; I always used other methods along with MCQs. I’m up from 59 to 74. I am still insecure, but I just need this one last push! Thanks- good luck to you too.
Stilgoin, CPAThere are enough critics. Be an encourager
B | 62, 78
A | 73, 67, 79
R | 82
F | 59, 59, WaitingEthics | 93
"Success is not final, failure is not fatal: it is the courage to continue that counts."
~Winston Churchill“In a world full of critics, be an encourager."
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