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BSO, Inc., has assets of $780,000 and liabilities of $585,000 resulting in a debt-to-assets ratio of 0.75. For each of the following transactions, determine whether
BSO, Inc., has assets of $780,000 and liabilities of $585,000 resulting in a debt-to-assets ratio of 0.75. For each of the following transactions, determine whether the debt-to-assets ratio will increase, decrease, or remain the same, and enter the value of the new debt-to-assets ratio. Each item is independent. (Round your answers to 2 decimal places.) Debt-to-Assets Ratio a. Purchased $56,000 of new inventory on credit. b. Paid accounts payable in the amount of $104,000 c. Recorded accrued salaries in the amount of $190,000. d. Borrowed $340,000 from a local bank, to be repaid in 90 days. On January 1, 2018, Loop Raceway issued 520 bonds, each with a face value of $1,000, a stated interest rate of 5 percent paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest rate was 6 percent, so the total proceeds from the bond issue were $506,090. Loop uses the straight-line bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required 1. Prepare a bond amortization schedule 2-5. Prepare the journal entries to record the bond issue, the interest payments on December 31, 2018 and 2019, the interest and face value payment on December 31, 2020 and the bond retirement. Assume the bonds are retired on January 1, 2020, at a price of 98 Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 5 Prepare a bond amortization schedule Changes During the Period Ending Bond Liability Balances Discount on Carrying Period Ended Cash Paid Discount Amortized Interest Expense Bonds Payable Bonds Payable Value 01/01/18 12/31/18 12/31/19 12/31/20 0 0 0 0
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