The notes to Golden Fried Chicken's financial statements reported the following data on September 30, Year 1
Question:
The notes to Golden Fried Chicken's financial statements reported the following data on September 30, Year 1 (the end of the fiscal year):
\section*{Required}
1. Answer the following questions about Golden's long-term liabilities:
a. What is the maturity value of the \(5 \%\) debenture bonds?
b. What are Golden's annual cash interest payments on the \(5 \%\) debenture bonds?
c. What is the carrying amount of the \(5 \%\) debenture bonds at September 30, Year 1?
2. Prepare an amortization table through September 30 , Year 4 , for the \(5 \%\) debenture bonds. Round all amounts to the nearest thousand dollars, and assume that Golden pays interest annually on September 30.
3. Record the September 30, Years 3 and 4 , interest payments on the \(5 \%\) debenture bonds.
4. There is no premium or discount on the notes payable. Assuming that annual interest is paid on September 30 each year, record Golden's September 30, Year 2, interest payment on the notes payable. Round interest to the nearest thousand dollars.
5. Show how Golden Fried Chicken would report the debenture bonds payable and notes payable at September 30, Year 4.
Step by Step Answer:
Financial Accounting
ISBN: 9780133118209
2nd Edition
Authors: Charles T. Horngren, Jr. Harrison, Walter T.