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Cozumel Corporation has 10,000,000 of 20-year, bonds dated June 1, 2014, with interest payment dates of May 31 and November 30. After 10 years, the

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Cozumel Corporation has 10,000,000 of 20-year, bonds dated June 1, 2014, with interest payment dates of May 31 and November 30. After 10 years, the bonds are callable at 104, and each $1,000 bond is convertible into 25 shares of $20 common stock. The company's fiscal year ends on December 31. It uses the straight-line method to amortize bond premiums or discounts. 1. Assume the bonds are issued at 103 on June 1, 2014. Determine: a. How much cash is received? b. How much is Bonds Payable? c. What is the difference between a and b called, and how much is it? With regard to the bond interest payment on November 30, 2014: i. ii. iii. How much cash is paid in interest? How much is the amortization? How much is interest expense? 2. Assume the bonds are issued at 97 on June 1, 2014. Determine: a. How much cash is received? b. How much is Bonds Payable? c. What is the difference between a and b called, and how much is it? With regard to the bond interest payment on November 30, 2014: How much cash is paid in interest? How much is the amortization? iii. How much is interest expense? Cozumel Corporation has 10,000,000 of 20-year, bonds dated June 1, 2014, with interest payment dates of May 31 and November 30. After 10 years, the bonds are callable at 104, and each $1,000 bond is convertible into 25 shares of $20 common stock. The company's fiscal year ends on December 31. It uses the straight-line method to amortize bond premiums or discounts. 1. Assume the bonds are issued at 103 on June 1, 2014. Determine: a. How much cash is received? b. How much is Bonds Payable? c. What is the difference between a and b called, and how much is it? With regard to the bond interest payment on November 30, 2014: i. ii. iii. How much cash is paid in interest? How much is the amortization? How much is interest expense? 2. Assume the bonds are issued at 97 on June 1, 2014. Determine: a. How much cash is received? b. How much is Bonds Payable? c. What is the difference between a and b called, and how much is it? With regard to the bond interest payment on November 30, 2014: How much cash is paid in interest? How much is the amortization? iii. How much is interest expense

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