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10 11 112 13 14 16 17 What is the journal entry to record issuing a $1,000,000 bond for $1,038,606 ? OBJECTIVE 3 TOPIC- Reporting
10 11 112 13 14 16 17 What is the journal entry to record issuing a $1,000,000 bond for $1,038,606 ? OBJECTIVE 3 TOPIC- Reporting of Bonds Payable Regarding the account "Discount on Bonds Payable": What is the normal balance? What type of an account is it? What statement does it show up on? What is the normal balance of the "Premium of Bonds Payable": What is the normal balance? What type of an account is it? What statement does it show up on? - OBJECTIVE 4 TOPIC- The Times Interest Earned Ratio: NOTE: As creditors, bondholders are concerned with the company's ability to pay its interest payments and repay the maturity value of the bonds. NOTE: Analysis assess this risk by calculating the times interest curred ratio. This ratio tells the number of times interest payments could be paid out of current period earnings. This measures the company's ability to pay its interest payments. NOTE: It is computed as: times interest earned = (income before income tax expense + interest expense) interest expense. DEFINE the following: Times Interest Eurned: What does the "times interest earned ratio compare the "pool" of money available for interest payments to? . Which of the following is favorable? The larger the pool of money or the smaller the "pool of money"? OBJECTIVE 5 TOPIC-The Selling Price of Bond Payable Uslug Present Value Concepts, What is the name of the rate used to calculate the interest payment on a Bond, Contract Rate or Market Rate? What is the name of the rate used to calculate the Prescot Value of a Bond, Contract Rate or Market Rate? OBJECTIVE 6 TOPIC- The Effective Interest Rate Method of Amortizing Bond Discounts and Premiums. What is the primary difference between the effective interest rate method and the straight-line-method in calculating the amount of interest expense each period
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