Question
Analyzing and Reporting Financial Statement Effects of Bond Transactions On January 1 of the current year, Trueman Corporation issued $600,000 of 20-year, 11% bonds for
Analyzing and Reporting Financial Statement Effects of Bond Transactions On January 1 of the current year, Trueman Corporation issued $600,000 of 20-year, 11% bonds for $554,861, yielding a market (yield) rate of 12%. Interest is payable semiannually on June 30 and December 31. (a) Confirm the bond issue price.
Round answers to the nearest whole number.
| Present value of principal repayment | Answer
|
| Present value of interest payments | Answer
|
| Selling price of bonds | $ 554,861 |
(b) Indicate the financial statement effects using the template for (1) bond issuance, (2) semiannual interest payment and discount amortization on June 30, and (3) semiannual interest payment and discount amortization on December 31 of the current year.
Round answers to the nearest whole number. Use negative signs with answers, when appropriate.
| Balance Sheet | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Transaction | Cash Asset | + | Noncash Assets | = | Liabilities | + | Contributed Capital | + | Earned Capital | |
| (1) | Answer
| Answer
| Answer
| Answer
| Answer
| |||||
| (2) | Answer
| Answer
| Answer
| Answer
| Answer
| |||||
| (3) | Answer
| Answer
| Answer
| Answer
| Answer
| |||||
| Income Statement | |||||
|---|---|---|---|---|---|
| Revenue | - | Expenses | = | Net Income | |
| Answer
| Answer
| Answer
| |||
| Answer
| Answer
| Answer
| |||
| Answer
| Answer
| Answer
| |||
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Derivatives And Internal Models
Authors: Hans Peter Deutsch, Mark W. Beinker
5th Edition
3030229017, 9783030229016
