On March 1, 2016, Rock Canyon Golf Course issued $750,000 of 10-year, 9 percent bonds payable. The
Question:
On March 1, 2016, Rock Canyon Golf Course issued $750,000 of 10-year, 9 percent bonds payable. The bonds were sold for $765,000. The bonds pay interest each August 31 and February 28, and any discount or premium is amortized using straight-line amortization.
Requirements
1. Fill in the blanks to complete these statements:
a. Rock Canyon Golf Course's bonds are priced at (express the price as a percentage) _______________.
b. When Rock Canyon Golf Course issued its bonds, the market interest rate was (higher than, lower than, or equal to) _______________ 9 percent.
c. The amount of bond discount or premium is $ _______________.
2. Record the following transactions:
a. Issuance of the bonds payable on March 1, 2016; explanations are not required.
b. Payment of interest (and amortization of discount or premium if any) on August 31, 2016; explanations are not required
c. Accrual of interest (and amortization of discount or premium if any) on December 31, 2016; explanations are not required
3. At what amount will Rock Canyon Golf Course report the bonds on its balance sheet at December 31, 2016?
Balance SheetBalance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Req 1 a Rock Canyon Golf Coursesbonds are priced at102 765000750000 b ...View the full answer
