Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization schedules...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization schedules regarding two bond issues: Bond Issue A Period Ending June 1/20 Dec. 1/20 Dec. 1/26 June 1/27 Dec. 1/27 June 1/28 Dec. 1/28 June 1/29 Totals (A) Cash Interest Paid $730,000 x 11.0 % x 6/12 *Adjusted for rounding $ 40,150 40,150 40,150 40,150 40,150 40,150 40,150 $ 722,700 (B) Period Interest Expense (E) x 10.0 % x 6/12 $ 38,633 37,426 37,290 37,147 36,997 36,839 36,678 $ 680,033 (C) Amort. (A) - (B) $ 1,517 2,724 2,860 3,003 3,153 3,311 3,472 $42,667 (D) Unamortized Balance $42,667 41,150 15,799 12,939 9,936 6,783 3,472 0 (E) Carrying Value $730,000 + (D) $772,667 771,150 745,799 742,939 739,936 736,783 733,472 730,000 f. Show how bond A would appear on the balance sheet under non-current liabilities at July 31, 2026. (Enter all amounts as positive values.) Balance Sheet (Partial) Non-current liabilities Bonds payable, 11.0%, due June 1, 2029 Add: Premium on bonds payable $ 730,000 $ 730,000 g. Calculate the total bond A interest expense that would appear on the income statement for the year ended July 31, 2027. Total bond interest expense h. Independent of (a) through (g), assume bond A issues were retired on December 1, 2027, at 97. Record the entries View transaction list Journal entry worksheet < 1 2 V Bond Issue B Period Ending Apr. 1/18 Jul. 1/18 Apr. 1/26 Jul. 1/26 Oct. 1/26 Jan. 1/27 Apr. 1/27 Jul. 1/27 Oct. 1/27 Jan. 1/28 Apr. 1/28 Totals (A) Cash *Adjusted for rounding Interest Paid $590,000.0 x (E) x 12.0% x 11.0 % x 3/12 3/12 $ 16,225 16, 225 16,225 16,225 16,225 16,225 16,225 16,225 16,225 16,225 $ 649,000 (B) Period Interest Expense $ 16,677 17,356 17,389 17,424 17,460 17,497 17,536 17,575 17,615 17,655 * $ 683,094 (C) Amort. (A) $ 452 - (B) 1,131 1,164 1,199 1,235 1,272 1,311 1,350 1,390 1,430 $34,094 (D) Unamortized Balance $34,094 33,642 10,351 9,187 7,988 6,753 5,481 4,170 2,820 1,430 0 (E) Carrying Value $590,000 - (D) $ 555,906 556,358 579,649 580,813 582,012 583,247 584,519 585,830 587,180 588,570 590,000 b. Journalize the issuance of bond B on April 1, 2018. View transaction list Journal entry worksheet 1 Record the Issuance of bonds at a discount. Note: Enter debits before credits. Date April 01, 2018 General Journal Debit Credit c. What is the contract interest rate for the issue bond B? Contract interest rate % d. Interest of how much is paid how often for bond B issued? Interest paid e. What is the term of bond B issue? Term of each bond issue year term f. Show how bond B would appear on the balance sheet under non-current liabilities at July 31, 2026. Non-current liablities Balance Sheet (Partial) g. Calculate the bond B interest expense that would appear on the income statement for the year ended July 31, 2027. Total bond interest expense h. Independent of (a) through (g), assume that bond B issues was retired on December 1, 2027, at 97. Record the entries. View transaction list Journal entry worksheet 1 2 Record the interest paid on bonds. > Journal entry worksheet < 1 2 Record the interest paid on bonds. Note: Enter debits before credits. Date December 01, 2027 General Journal Debit Credit Journal entry worksheet 1 2 Record the retired bonds. Note: Enter debits before credits. Date December 01, 2027 General Journal Debit Credit Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization schedules regarding two bond issues: Bond Issue A Period Ending June 1/20 Dec. 1/20 Dec. 1/26 June 1/27 Dec. 1/27 June 1/28 Dec. 1/28 June 1/29 Totals (A) Cash Interest Paid $730,000 x 11.0 % x 6/12 *Adjusted for rounding $ 40,150 40,150 40,150 40,150 40,150 40,150 40,150 $ 722,700 (B) Period Interest Expense (E) x 10.0 % x 6/12 $ 38,633 37,426 37,290 37,147 36,997 36,839 36,678 $ 680,033 (C) Amort. (A) - (B) $ 1,517 2,724 2,860 3,003 3,153 3,311 3,472 $42,667 (D) Unamortized Balance $42,667 41,150 15,799 12,939 9,936 6,783 3,472 0 (E) Carrying Value $730,000 + (D) $772,667 771,150 745,799 742,939 739,936 736,783 733,472 730,000 f. Show how bond A would appear on the balance sheet under non-current liabilities at July 31, 2026. (Enter all amounts as positive values.) Balance Sheet (Partial) Non-current liabilities Bonds payable, 11.0%, due June 1, 2029 Add: Premium on bonds payable $ 730,000 $ 730,000 g. Calculate the total bond A interest expense that would appear on the income statement for the year ended July 31, 2027. Total bond interest expense h. Independent of (a) through (g), assume bond A issues were retired on December 1, 2027, at 97. Record the entries View transaction list Journal entry worksheet < 1 2 V Bond Issue B Period Ending Apr. 1/18 Jul. 1/18 Apr. 1/26 Jul. 1/26 Oct. 1/26 Jan. 1/27 Apr. 1/27 Jul. 1/27 Oct. 1/27 Jan. 1/28 Apr. 1/28 Totals (A) Cash *Adjusted for rounding Interest Paid $590,000.0 x (E) x 12.0% x 11.0 % x 3/12 3/12 $ 16,225 16, 225 16,225 16,225 16,225 16,225 16,225 16,225 16,225 16,225 $ 649,000 (B) Period Interest Expense $ 16,677 17,356 17,389 17,424 17,460 17,497 17,536 17,575 17,615 17,655 * $ 683,094 (C) Amort. (A) $ 452 - (B) 1,131 1,164 1,199 1,235 1,272 1,311 1,350 1,390 1,430 $34,094 (D) Unamortized Balance $34,094 33,642 10,351 9,187 7,988 6,753 5,481 4,170 2,820 1,430 0 (E) Carrying Value $590,000 - (D) $ 555,906 556,358 579,649 580,813 582,012 583,247 584,519 585,830 587,180 588,570 590,000 b. Journalize the issuance of bond B on April 1, 2018. View transaction list Journal entry worksheet 1 Record the Issuance of bonds at a discount. Note: Enter debits before credits. Date April 01, 2018 General Journal Debit Credit c. What is the contract interest rate for the issue bond B? Contract interest rate % d. Interest of how much is paid how often for bond B issued? Interest paid e. What is the term of bond B issue? Term of each bond issue year term f. Show how bond B would appear on the balance sheet under non-current liabilities at July 31, 2026. Non-current liablities Balance Sheet (Partial) g. Calculate the bond B interest expense that would appear on the income statement for the year ended July 31, 2027. Total bond interest expense h. Independent of (a) through (g), assume that bond B issues was retired on December 1, 2027, at 97. Record the entries. View transaction list Journal entry worksheet 1 2 Record the interest paid on bonds. > Journal entry worksheet < 1 2 Record the interest paid on bonds. Note: Enter debits before credits. Date December 01, 2027 General Journal Debit Credit Journal entry worksheet 1 2 Record the retired bonds. Note: Enter debits before credits. Date December 01, 2027 General Journal Debit Credit
Expert Answer:
Answer rating: 100% (QA)
To answer the given questions lets go step by step a The balance sheet presentation for Bond A under noncurrent liabilities at July 31 2026 would be a... View the full answer
Related Book For
Fundamental Accounting Principles Volume II
ISBN: 978-1260305838
16th Canadian edition
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann
Posted Date:
Students also viewed these accounting questions
-
Mahalo Inc. has a July 31 year-end. It showed the following partial amortization schedules regarding two bond issues: Bond Issue A Bond Issue B Required Answer the following for each bond issue: a....
-
Mahalo Boat Adventure Inc. has a July 31 year-end. It showed the following partial amortization schedules regarding two bond issues: Required Answer the following for each bond issue: a. Were the...
-
RFL Inc., a Canadian-controlled private corporation, has a July 31 year-end. It is not associated with any other corporation. Its tax manager has estimated its 2019 federal income tax liability at...
-
Capulet Company establishes a stock-appreciation rights program that entitles its new president Ben Davis to receive cash for the difference between the market price of the stock and a...
-
In calculating the rotational energy levels of a diatomic molecule, we did not consider rotation of the molecule about the line joining the atoms. (a) Estimate the moment of inertia of the H2...
-
Why are most of the volume for stock index futures concentrated in the near contract?
-
Assuming that the mixture is ideal, estimate infinite dilution Fickian diffusivities at 283.3 \(\mathrm{K}\) for chlorobenzene in liquid bromobenzene and for bromobenzene in liquid chlorobenzene from...
-
Given the information in the following table: a. Construct the network diagram. b. Find each activitys ES, EF, LS, and LF. c. Identify all paths. Which path is the critical path? d. Calculate the...
-
Cash flows from (used for) operating activitiesindirect method Staley Inc. reported the following data: Line Item Description Amount Net income $477,100 Depreciation expense 55,300 Loss on disposal...
-
Wayland Custom Woodworking is a firm that manufactures custom cabinets and woodwork for business and residential customers. Students will have the opportunity to establish payroll records and to...
-
Let A = (9,51) and B = (5,236), where the angles are measured counterclockwise from the positive x-axis. What is C = 4A + B? Give your answer in component form. x component: y component:
-
Accounting Question: Consolidation Accounting: Company A acquires 8 0 % of Company B for $ 5 0 0 , 0 0 0 . The fair value of Company B \' s net assets at the acquisition date is $ 5 5 0 , 0 0 0 ....
-
k nces Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order...
-
nces Empire Airlines reports the following cost data for the year. The company flew 100 private flights during the year. A group has offered Empire $13,000 for a private flight to Chicago for its...
-
Why is it important for firms to benchmark their performance against competitors? Explain.
-
How do interactions between genotype and environment drive the expression of quantitative traits, and what statistical methods are employed to analyze and predict phenotypic outcomes in response to...
-
Consider the following grammar: - a b b | b a | a Show that "bbaab" is a syntactically correct sentence in the language generated by the grammar above? Please draw the parse tree as well.
-
What is the amount of total interest dollars earned on a $5,000 deposit earning 6% for 20 years?
-
Velor Ltd., a patio gas heater company, showed the following adjusted information on August 31, 2020, its second year-end: a. Prepare the appropriate closing entries. b. Prepare a statement of...
-
Sarahs Pottery and Gift store had the following transactions: a. On November 15, 2020, Katie from the small office business Custom Graphics contacted Sarah to purchase gift cards for the holiday...
-
On November 1, 2020, Harris, Davis, and Tallis formed Restore, a home renovation business, by contributing $56,000 in cash, $91,000 of equipment, and a truck worth $42,000, respectively. The partners...
-
The proportion of income received by the richest 5 percent of Americans has a. edged upward since the 1980s. b. held steady since the 1980s. c. decreased slightly since the 1980s. d. decreased...
-
Which of the following are overrepresented among those with low incomes? a. College students working toward their graduate degrees b. Single-parent families c. Young, inexperienced workers d. All of...
-
What has happened to income distribution since 1935?
Study smarter with the SolutionInn App