(1)SupposeMcDonald's2022 financial statements contain the following selected data (in millions).

Current assets $3,351.0 Interest expense $460.0

Total assets 30,159.0 Income taxes 1,923.0

Current liabilities 2,928.0 Net income 4,538.0

Total liabilities 16,126.0

(a1)

Compute the following values.

a. Working capital.(Round to 1 decimal place, e.g. 5,275.5) $ millions

b. Current ratio.(Round to 2 decimal places, e.g. 6.25:1.) :1

c. Debt to assets ratio.(Round to 0 decimal places, e.g. 62%.) %

d. Times interest earned.(Round to 2 decimal places, e.g. 6.25.) times

(2)On October 1, 2021,MontyCorp. issued $828,000,7%,10-year bonds at face value. The bonds were dated October 1, 2021, and pay interest annually on October 1. Financial statements are prepared annually on December 31.

Part1 make the journal entry to record the issuance of the bonds.(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date Account Titles and Explanation Debit Credit

Oct. 1,

2021

Part2 Prepare the adjusting entry to record the accrual of interest on December 31, 2021.(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date Account Titles and Explanation Debit Credit

Oct. 1,

2021

Part3 Show the balance sheet presentation of bonds payable and bond interest payable on December 31, 2021.

MONTYCORP.

Balance Sheet (Partial)

December 31, 2021

Current Liabilities

Long-term Liabilities

Part4 Prepare the journal entry to record the payment of interest on October 1, 2022.(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date Account Titles and Explanation Debit Credit

Oct. 1,

2021

Part5 Prepare the adjusting entry to record the accrual of interest on December 31, 2022.(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date Account Titles and Explanation Debit Credit

Dec. 31,

2022

Part 6 Assume that on January 1, 2023,Montypays the accrued bond interest and calls the bonds. The call price is104. Record the payment of interest and redemption of the bonds.(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date Account Titles and Explanation Debit Credit

Jan. 1,

2023

(To record payment of interest)

Jan. 1,

2023

(To record the redemption of the bonds)