Question
1. A firm issues its 10-year, 9%, $500,000 Par value bonds at a selling price of 92 percentages. The company uses the straight-line method to
1. A firm issues its 10-year, 9%, $500,000 Par value bonds at a selling price of 92 percentages. The company uses the straight-line method to amortize bond premiums and discounts. The bonds pay interest semi-annually.
a)What is the bond price?
b)Record the sale of the bond:
c)Record the first interest payment
d)Record the second interest payment.
e)Record the final payment of the Face Value
2-On January 1st of this year, the stockholder's equity section in the Slate Gravel Co. consisted of the following items:
Common Stock, $1 par value, 1 million shares
Authorized, 300,000 shares issued & outstanding $300,000
Paid in Capital in Excess of Par (APIC) 100,000
Retained earnings 500,000
Total Stockholder's equity.......... $900,000
Based on the information above, prepare journal entries in the spaces below to record the following transactions. Use good General Journal form, but you may omit explanations:
April 4 Issued 10,000 shares of stock at $15.00 per share.
June 20 The board of directors declared a $1.00 per share cash dividend payable July 15 to the July 10 stockholder's of record.
July 15 Paid the cash dividend previously declared.
July 22 Issued 5,000 shares of stock for $10.00 per share.
Dec. 18 The board of directors declared a $0.10 per share cash dividend payable January 5th, of next year to the January 1st, stockholder's of record.
3-Prepare Cash Flow statement for SMART Corporation under Direct method using the following information:
Beginning Cash balance 12,000
Cash collected from sales 10,000
Cash collected issuance of bond 20,000
Cash receipt from sell of equipment 5,000
Cash receipt from sell of stock 8,000
Salary payments for employees 4,000
Tax payments 2,500
Dividend payments 1,000
Company bought Furnitures 1,500
PREPARE CASH FLOW STATEMENT
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