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MS On January 1, 2016, Lamb Services issued $200,000, 9% , four - year bonds. Interest is paid semiannually on June 30 and December 31,
MS On January 1, 2016, Lamb Services issued $200,000, 9% , four - year bonds. Interest is paid semiannually on June 30 and December 31, The bonds were issued at $193,537 to yield an annual return of 10 %. lem 14-1 ht-line and Eve interest red Required: 1. Prepare an amortization schedule that determines interest at the effective interest rate. 2 14-3 2. Prepare an amortization schedule by the straight-line method. 3. Prepare the journal entries to record interest expense on June 30, 2018, by each of the two approaches. 4. Assuming the market rate is still 10 %, what price would a second investor pay the first investor on June 30, 2018, for $20,000 of the bonds? 14-2 Warren Machinery, Inc. constructed an industrial lathe for Nelson Equipment that was paid for the conveyor by issuing a $500,000, 4-year note that specified 5% interest to be paid built for Nelson so its cash price transactions it was determined that a reasonable interest rate was 10 %. completed and ready for use on January 1, 2016. Nelson ote tic on December 31 of each year. The conveyor was custom- was unknown. By comparison with similar Required: 1. Prepare the journal entry for Nelson's purchase of the conveyor on January 1, 2016. 2. Prepare an amortization schedule for the four-year term of the note 3. Prepare the journal entry for Nelson's third interest payment on 31, 2018. 4. If Nelson's note had been an installment note to be paid in four equal payments at the end of each year beginning December 31, 2016, what would be the amount of each installment? 5. Prepare an amortization schedule for the four-year December term of the installment veduce oalane $0 instaimunt note. 6. Prepare the journal entry for Nelson's third installment payment on December 31, 2018. otoul
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