Answer E7-38

Analyzing and Reporting Financial Statement Effects of Bond Transactions On January 1, 2017, Banek Inc issued $350,000 of 8%, 9-year bonds for S309086, which implies a market (yield) rate of 10%. Semiannual interest is payable on June 30 and December 31 of each year. a. Show computations to confirm the bond issue price. b. Indicate the financial statement effects using the template for (1) bond issuance, (2) semiannual inter- E7-37. LO3 est payment and discount amortization on June 30, 2017, and (3) semiannual interest payment and discount amortization on December 31, 2017. Analyzing and Reporting Financial Statement Effects of Bond Transactions On January 1 , 20 17, Shields Inc. issued $ 1 ,000,000 of 9%, 20-year bonds for $ 1 098,964, yielding a mar- ket (yield) rate of 8%. Semiannual interest is payable on June 30 and December 31 of each year. a. Show computations to confirm the bond issue price b. Indicate the financial statement effects using the template for (1) bond issuance, (2) semiannual inter- E7-38. est payment and premium amortization on June 30, 2017, and (3) semiannual interest payment and premium amortization on December 31, 2017. Analyzing and Reporting Financial Statement Effects of Bond Transactions On January 1, 2017, Banek Inc issued $350,000 of 8%, 9-year bonds for S309086, which implies a market (yield) rate of 10%. Semiannual interest is payable on June 30 and December 31 of each year. a. Show computations to confirm the bond issue price. b. Indicate the financial statement effects using the template for (1) bond issuance, (2) semiannual inter- E7-37. LO3 est payment and discount amortization on June 30, 2017, and (3) semiannual interest payment and discount amortization on December 31, 2017. Analyzing and Reporting Financial Statement Effects of Bond Transactions On January 1 , 20 17, Shields Inc. issued $ 1 ,000,000 of 9%, 20-year bonds for $ 1 098,964, yielding a mar- ket (yield) rate of 8%. Semiannual interest is payable on June 30 and December 31 of each year. a. Show computations to confirm the bond issue price b. Indicate the financial statement effects using the template for (1) bond issuance, (2) semiannual inter- E7-38. est payment and premium amortization on June 30, 2017, and (3) semiannual interest payment and premium amortization on December 31, 2017