Answer two of the following three Problems

Problem 1

Company: XYZ Company

Date of bonds: January 1, 2019

Term: 4 years

Face (Par) Value: $1,000

Stated interest rate: 12%

Effective interest rate: 10%

Interest payment dates on January 1 and July 1

1. Compute the market price of the bonds and journalize the issuance of the bonds.

2. Prepare a schedule to amortize the premium or discount using the effective interest method of amortization for the first year and journalize the entries to record the interest payment on July 1, 2019 and January 1 2020.

3. Interest expense for the year ended December 31, 2019 is $______________.

Problem 2

Materials inventory December 1, 2019 $45 Sales in December $448

Materials inventory December 31, 2019 21 Cost of goods sold 356

Material purchased during December (a) Gross profit (e)

WIP inventory December 1, 2019 48 Operating expenses (f)

WIP inventory December 31, 2019 45 Net income 38

Finished goods inventory December 1, 2019 62

Finished goods inventory December 1, 2019 (b)

Cost of goods manufactured (c)

Cost of direct materials used in production (d)

Direct labor used in December 133

Factory overhead applied in December 59

Total manufacturing costs incurred in December 350

Total manufacturing costs 398

1. Prepare a statement of cost of goods manufactured for The Company for the year ended December 31, 2019 in proper format.

2. Prepare an income statement for The Company for the year ended December 31, 2019 in proper format.

2. Complete the following:

a. d.

b. e.

c. f.

Problem 3

On December 1, Sprint Manufacturing purchased 5 rolls of paper on account at $125 per roll for use in production of the December magazine. On December 5, 4 rolls of paper were issued to Job 100 in the printing department. A worker in the printing department logged 45 hours in Job 100 at a labor rate of $20 per hour. Sprint Manufacturing expected to incur $300,000 of total factory overhead costs for the year and 10,000 hours of direct labor. On December 20, the magazine was completed and shipped to the magazine stand with an invoice for $5,500.

Journalize the following (using T-Accounts as necessary):

1. The purchase of the paper.

2. The transfer of raw materials to work in process

3. The application of direct labor

4. The application of manufacturing overhead to Job 100 based on direct labor hours

5. The transfer of Job 100 to finished goods at cost

6. Gross profit on Job 100 is ________________.