Vaughn Company loans Sarasota Company $1,950,000 at 6% for 3 years on January 1, 2020. Vaughn intends to hold this loan to maturity and has the financial ability to do so. The fair value of the loan at the end of each reporting period is as follows. December 31, 2020 $2,000,000 December 31, 2021 1,972,000 December 31, 2022 1,950,000 Prepare the journal entry(ies) at December 31, 2020, and December 31, 2022, for Vaughn related to these bonds, assuming (a) it does not use the fair value option, and (b) it uses the fair value option. Interest is paid on January 1. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

JOURNAL ENTRIES

a) 31 Dec 2020

Debit Interest receivable $ 117,000 Credit Interest income $117,000

31 Dec 2022

Debit Interest is receivable $117,000 Credit Interest Income $117,000

Debit Bank $1,950,000 Credit Bond investment $1,950,000

b) 31 Dec 2020

Debit Interest receivable $ 117,000 Credit Interest income $117,000

31 Dec 2022

Debit Interest is receivable $118,320 Credit Credit Interest Income$118,320

Debit fair value loss on bond $ 22,000 Credit Bond investment $22,000

Debit Bank $1,950,000 Credit Bond investment $1,950,000

Explanation:

interest =  loan * % = $1,950,000 * 6% = $117,000

using fair value

interest = loan (fair value) * %

interest is calculated for at the amount of loan beginning that current year is calculated for the months the loan is existence for in that particular year.

Because of fair value changes in the loan, we must recognize the changes in profit and loss section either in incomes if it is a gain or in expenses if it is a loss

sound is invisible, but sometimes we can feel it. when a kettle-drum is thumped with a stick that time the tight drum skin moving up and down very quickly for some time and then it pumped sound waves into the air. loudspeakers also work in a similar manner.

components of a speaker:

electromagnet

in order to translate an electrical signal into an audible sound, an electromagnet is used in looudspeakers

  suspension

suspension is used to   center the voice coil in the gap of the magnet and it exerts a restoring force to keep it there. suspension is used to limits the maximum mechanical excursion of the diaphragm and voice coil.

voice coil

voice coil is a coil of wire which is attached to the apex of a loudspeaker cone. it provides the motive force to the cone by the reaction of a magnetic field to the current passing through it.

cone

in a   loudspeaker, a   thin, semi-rigid membrane attached to the voice coil, which moves in a magnetic gap due to which it vibrates   and produced sound. it is known as diaphragm and it can also be called a cone, though not all speaker diaphragms are cone-shaped.

surround

surround is also known as front suspension. surround is used to join the cone to the chassis. together with the suspension it controls the cone excursion, and it is also used to   determine how energy which is   travelling through the cone is absorbed, and how the speaker limits when it reaches the ends of its travel.

dustcap

dustcap is used to protect the voice coil from dust and dirt. it is a part of the cone.

how speaker work

the outer part of the cone is fastened to the outer part of the loudspeaker's circular metal rim. the inner part is fixed to   voice coil that sits just in front of a permanent magnet . when loudspeaker is hooked up to a stereo, electrical signals feed through the speaker cables into the coil. it will convert the coil into an electromagnet magnet . when electricity flows back and forth in the cables, the electromagnet either repels or attract the permanent magnet. this moves the coil back and forth, and it pull and push the loudspeaker cone. like a drum skin vibrating back and forth, the moving cone pumps sounds out into the air.in this way loudspeakers works.

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.