23. eBook Exercise 8-31 Amortization of Intangible Assets Ramon Productions purchased the copyright to a film script for $264,000 on July 1. The copyright protects the owners' legal rights for the next 20 years, but producers at Ramon estimate they will only be able to use the copyright for the next 15 years. Ramon Productions uses the straight-line method of amortization and has a June 30 year-end. Required: Prepare the journal entry to record amortization expense for the first year. June 30 ________________________________________ 24. eBook Problem 8-35 Fixed Asset Transactions and Reporting A partial portion of the balance sheet at December 31, 2012, for the Gusto Corporation is presented below: The following transactions occurred during 2013: On January 1, retired equipment with a net book value of $2,000. The equipment was purchased for $8,000. No value was received from the retirement. On January 1, Gusto sold a building with an original 30-year useful life and no estimated salvage value for $90,000 cash. The building was originally purchased on December 31, 2002 for $120,000. Purchased land for $90,000 on April 30. On July 1, Gusto purchased equipment for $30,000 by signing a long-term note payable. Prepared depreciation entries on December 31. Depreciation expense for the year was $40,000 for buildings and $4,500 for equipment. Required: a. Prepare journal entries to record all of the above transactions. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0". Jan. 1 Equipment Jan. 1 Building Apr. 30 July 1 Dec. 31 Dec. 31 b. Prepare the property and equipment portion of Gusto's balance sheet at December 31, 2013. Property and Equipment, 12/31/13: $ $ $ Total Property and Equipment $ 25. eBook Exercise 9-20 Recording Bonds at a Premium and a Discount On January 1, 2012, Hampton, Inc. issues $3,000,000 of 5-year, 10% bonds with interest payable on July 1 and January 1. Hampton prepares financial statements on December 31 and amortizes any discount or premium using the straight-line method. Required: a. Prepare all journal entries necessary in 2012 assuming the bonds were issued at 96. For a compound entries, if an amount box does not require an entry, leave it blank. If required, round to the nearest dollar. 2012 Jan. 1 2012 July 1 2012 Dec. 31 b. Prepare all journal entries necessary in 2012 assuming the bonds were issued at 103. For a compound entries, if an amount box does not require an entry, leave it blank. If required, round to the nearest dollar. 2012 Jan. 1 2012 July 1 2012 Dec. 31 ________________________________________ 26. eBook Exercise 9-22Bond Amortization Schedule Fred Corp. provides the following two lines of a bond amortization schedule: Required: Answer the following: a. Identify the column headings. Interest Payment Date Interest Paid _________________ _________________ _________________ Carrying Value 6/30/2014 $3,200 $200 $3,400 $2,200 $77,800 12/31/2014 $3,200 $200 $3,400 $2,000 $78,000 b. Was the bond issued at a discount, a premium, or at face value? _________________ c. What is the face value of the bonds? $ _________________ d. What is the stated interest rate? _________________ % e. Is the market interest rate greater than, less than, or equal to the stated interest rate? _________________ ________________________________________ 27. eBook Exercise 9-25 Bond Redemption A company issues $80,000 of 10-year bonds for $86,000. Immediately after the thirteenth semiannual interest payment, the company redeems the bonds for $83,700. The company uses the straight-line method of amortization. Required: Prepare the journal entry to record the bond redemption. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0". ________________________________________ 28. eBook Problem 9-36 Recording and Reporting Current Liabilities The following is a list of liability accounts on the ledger of Chop House Incorporated on January 1: The following transactions occurred during the month of January: The employees of the Chop House earned gross salaries of $45,000 during January. Withholdings were $2,500 for Social Security, $4,000 for federal income tax, and $1,900 for state income tax. The employer share of FICA taxes was also $2,500. Salaries earned in January will be paid during February. Required: a. Prepare journal entries for the January transactions. Assume that purchases are recorded directly into the inventory account. For compound entries, if an amount box does not require an entry, leave it blank. When required, round amounts to the nearest dollar. Jan. 1 Jan. 9 Jan. 15 Jan. 18 Jan. 23 b. Prepare adjusting entries at January 31 related to salaries, payroll taxes, and notes payable. For compound entries, if an amount box does not require an entry, leave it blank. When required, round amounts to the nearest dollar. Payroll Payroll taxes Interest c. Create the current liability section of the balance sheet at January 31. Chop House Current Liabilities Section January 31 Accounts Payable $ Notes Payable Federal Tax Withholdings Payable FICA Taxes Payable Interest Payable Salaries Payable Sales Tax Payable State Tax Withholdings Payable Unearned Revenue Total Current Liabilities $ ________________________________________