Question
18. On September 1, 2015, Daylight Donuts signed a $149,000, 9%, six-month note payable with the amount borrowed plus accrued interest due six months later
18.
On September 1, 2015, Daylight Donuts signed a $149,000, 9%, six-month note payable with the amount borrowed plus accrued interest due six months later on March 1, 2016. Daylight Donuts should report interest payable at December 31, 2015, in the amount of (Do not round your intermediate calculations):
$4,470
$2,235
$6,705
$0
19.
Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2015. THA's accountant has projected the following amortization schedule from issuance until maturity:
Date | Cash Paid | Interest Expense | Increase in Carrying Value | Carrying Value |
1/1/15 | $294,266 | |||
6/30/15 | $12,400 | $14,713 | $2,313 | 296,579 |
12/31/15 | 12,400 | 14,829 | 2,429 | 299,008 |
6/30/16 | 12,400 | 14,950 | 2,550 | 301,558 |
12/31/16 | 12,400 | 15,078 | 2,678 | 304,236 |
6/30/17 | 12,400 | 15,212 | 2,812 | 307,048 |
12/31/17 | 12,400 | 15,352 | 2,952 | 310,000 |
THA issued the bonds for:
$310,000
Cannot be determined from the given information.
$384,400
$294,266
20.
A bond issue with a face amount of $500,000 bears interest at the rate of 7%. The current market rate of interest is 6%. These bonds will sell at a price that is:
Equal to $500,000.
The answer cannot be determined from the information provided.
Less than $500,000.
More than $500,000.
21.
The Pita Pit borrowed $204,000 on November 1, 2015, and signed a six-month note bearing interest at 12%. Principal and interest are payable in full at maturity on May 1, 2016. In connection with this note, The Pita Pit should report interest expense at December 31, 2015, in the amount of (Do not round your intermediate calculations):
$12,240.
$4,080.
$24,480.
$0.
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