MyAccountingLab PROBLEMS (GROUP A) Problem 15-1A The board of directors of Jeter Production Co. Ltd. authorizes the issuance of 4 percent, 10-year bonds with a maturity value of $12,000,000. The semi-annual interest dates are May 31 and November 30. The bonds are issued through an underwriter on June 30, 2017, at par plus accrued interest from June 1, 2017. Jeter's year end is December 31. Required Journalizing bond transactions (at par) and reporting bonds payable on the balance sheet 1. b. Interest expense, $200,000 1. Journalize the following transactions: a. Issuance of the bonds on June 30, 2017 b. Payment of interest on November 30, 2017 c. Accrual of interest on December 31, 2017. d. Payment of interest on May 31, 2018. 2. Report interest payable and bonds payable as they would appear on the Jeter Production Co. Ltd. balance sheet at December 31, 2017 3. Why do we need to accrue interest on June 30 and again on December 31, twice in 2017? d. Payment 4Report internest payable and bonds payable as they wo Ld balance sheet at December 31, 2017. Excel Sp Template Analyzing a company's long-term debt, journalizing its transactions, and reporting the long-term debt on the balance sheet Problem 15-3A The notes to Shaolin Biotech Inc.'s financial statements recently reported the following data June 30, 2017, the company's year end: NOTE 4 INDEBTEDNESS Long-term debt at June 30, 2017, included the following: 600 percent debentures due June 30, 2036, with an effective interest rate of 7.00 percent, net of unamortized discount of $206,712. Other indebtedness with an interest rate of 5.00 percent, due $408,000 in 2021 and $392,000 in 2022.. 4. Interest expense, $40,000 $1,793,288 800,000 Assume Shaolin Biotech Inc. amortizes a discount by the effective-interest method. Required 1. Answer the following questions about Shaolin Biotech's long-term liabilities: a. What is the maturity value of the 6 percent debentures? b. What are Shaolin Biotech's annual cash interest payments on the 6 percent debentures? c. What is the carrying amount of the 6 percent debentures at June 30, 2017? 2018? d. How many years remain in the life of the 6 percent debentures? 2 Prepare an amortization table through June 30, 2020, for the 6 percent debentures. Round all amounts to the nearest dollar, and assume Shaolin Biotech pays interest annually on June 30 3. Record the June 30, 2019 and 2020, interest payments on the 6 percent debentures. 4. There is no premium or discount on the other indebtedness. Assuming annual interest is paid on June 30 each year, record Shaolin Biotech Inc.'s June 30, 2018, interest payment on the other indebtedness. Excel Spreadsheet Template Issuing convertible bonds at ing at Rport in alance st Problem 15-5A Amortizing a bond discount and premium by the effective-interest method; retirement of bonds; conversion of bonds Shield Transport Ltd. is authorized to issue 10-year, 6 percent convertible bonds with maturity value of $16,000,000. Interest is payable on June 30 and December 31. The bond are convertible on the basis of 50 common shares for each $1,000 bond. The following bond transactions took place: umaline 1. June 30, 2017, interest expense, $221,209 aline 2017 Jan. 2 Issued bonds with $6,400,000 maturity value. Since the market rate of inter- est on this date was 8 percent, the bonds sold for $5,530,219. Paid semi-annual interest and amortized the discount using the effective- Jun. 30 interest amortization method. Paid semi-annual interest and amortized the discount using the effective interest amortization method. Dec. 31 2018 Jun. 30 Paid semi-annual interest and amortized the discount using the effective interest amortization method. Retired bonds with a $3,200,000 maturity value at a rate of 94.00. Bondholders converted bonds with a $1,600,000 maturity value into com- 31 Jul. 2 2 mon shares. Required 1. Create an amortization schedule for the first three interest periods for the bonds sold on January 2, 2017. Round all amounts to the nearest whole dollar. Use the values from the schedule and any other information to journalize all the transactions above. 2. Show the balance sheet presentation of the bonds payable on July 2, 2018. MyAccountingLab PROBLEMS (GROUP A) Problem 15-1A The board of directors of Jeter Production Co. Ltd. authorizes the issuance of 4 percent, 10-year bonds with a maturity value of $12,000,000. The semi-annual interest dates are May 31 and November 30. The bonds are issued through an underwriter on June 30, 2017, at par plus accrued interest from June 1, 2017. Jeter's year end is December 31. Required Journalizing bond transactions (at par) and reporting bonds payable on the balance sheet 1. b. Interest expense, $200,000 1. Journalize the following transactions: a. Issuance of the bonds on June 30, 2017 b. Payment of interest on November 30, 2017 c. Accrual of interest on December 31, 2017. d. Payment of interest on May 31, 2018. 2. Report interest payable and bonds payable as they would appear on the Jeter Production Co. Ltd. balance sheet at December 31, 2017 3. Why do we need to accrue interest on June 30 and again on December 31, twice in 2017? d. Payment 4Report internest payable and bonds payable as they wo Ld balance sheet at December 31, 2017. Excel Sp Template Analyzing a company's long-term debt, journalizing its transactions, and reporting the long-term debt on the balance sheet Problem 15-3A The notes to Shaolin Biotech Inc.'s financial statements recently reported the following data June 30, 2017, the company's year end: NOTE 4 INDEBTEDNESS Long-term debt at June 30, 2017, included the following: 600 percent debentures due June 30, 2036, with an effective interest rate of 7.00 percent, net of unamortized discount of $206,712. Other indebtedness with an interest rate of 5.00 percent, due $408,000 in 2021 and $392,000 in 2022.. 4. Interest expense, $40,000 $1,793,288 800,000 Assume Shaolin Biotech Inc. amortizes a discount by the effective-interest method. Required 1. Answer the following questions about Shaolin Biotech's long-term liabilities: a. What is the maturity value of the 6 percent debentures? b. What are Shaolin Biotech's annual cash interest payments on the 6 percent debentures? c. What is the carrying amount of the 6 percent debentures at June 30, 2017? 2018? d. How many years remain in the life of the 6 percent debentures? 2 Prepare an amortization table through June 30, 2020, for the 6 percent debentures. Round all amounts to the nearest dollar, and assume Shaolin Biotech pays interest annually on June 30 3. Record the June 30, 2019 and 2020, interest payments on the 6 percent debentures. 4. There is no premium or discount on the other indebtedness. Assuming annual interest is paid on June 30 each year, record Shaolin Biotech Inc.'s June 30, 2018, interest payment on the other indebtedness. Excel Spreadsheet Template Issuing convertible bonds at ing at Rport in alance st Problem 15-5A Amortizing a bond discount and premium by the effective-interest method; retirement of bonds; conversion of bonds Shield Transport Ltd. is authorized to issue 10-year, 6 percent convertible bonds with maturity value of $16,000,000. Interest is payable on June 30 and December 31. The bond are convertible on the basis of 50 common shares for each $1,000 bond. The following bond transactions took place: umaline 1. June 30, 2017, interest expense, $221,209 aline 2017 Jan. 2 Issued bonds with $6,400,000 maturity value. Since the market rate of inter- est on this date was 8 percent, the bonds sold for $5,530,219. Paid semi-annual interest and amortized the discount using the effective- Jun. 30 interest amortization method. Paid semi-annual interest and amortized the discount using the effective interest amortization method. Dec. 31 2018 Jun. 30 Paid semi-annual interest and amortized the discount using the effective interest amortization method. Retired bonds with a $3,200,000 maturity value at a rate of 94.00. Bondholders converted bonds with a $1,600,000 maturity value into com- 31 Jul. 2 2 mon shares. Required 1. Create an amortization schedule for the first three interest periods for the bonds sold on January 2, 2017. Round all amounts to the nearest whole dollar. Use the values from the schedule and any other information to journalize all the transactions above. 2. Show the balance sheet presentation of the bonds payable on July 2, 2018