Question
On January 1, 2021, Cullumber Satellites issued $1,430,000, 10-year bonds. The bonds pay semi-annual interest on July 1 and January 1, and Cullumber has a
On January 1, 2021, Cullumber Satellites issued $1,430,000, 10-year bonds. The bonds pay semi-annual interest on July 1 and January 1, and Cullumber has a December 31 year end. A partial bond amortization schedule is presented below:
| Semi-Annual Interest Period | Interest Payment | Interest Expense | Amortization | Bond Amortized Cost | ||||||
| Jan. 1, 2021 | $1,328,381 | |||||||||
| July 1, 2021 | $ [1] | $ [2] | $3,593 | 1,331,974 | ||||||
| Jan. 1, 2022 | 42,900 | 46,619 | 3,719 | 1,335,693 | ||||||
| July 1, 2022 | 42,900 | 46,749 | [3] | 1,339,542 | ||||||
| Jan. 1, 2023 | 42,900 | 46,884 | [4] | [5] | ||||||
| July 1, 2023 | 42,900 | 47,023 | 4,123 | 1,347,649 | ||||||
| Jan. 1, 2024 | 42,900 | 47,168 | 4,268 | 1,351,917 | ||||||
Were the bonds issued at a premium or a discount? PremiumDiscount
What is the face value of the bonds?
| Face value of the bonds | $ |
What is the contractual rate of interest?
| Contractual rate of interest |
Fill in the missing amounts for items [1] through [5].
| Semi-Annual Interest Period | Interest Payment | Interest Expense | Amortization | Bond Amortized Cost | ||||
| Jan. 1, 2021 | $1,328,381 | |||||||
| July 1, 2021 | $ [1] | $ [2] | $3,593 | 1,331,974 | ||||
| Jan. 1, 2022 | 42,900 | 46,619 | 3,719 | 1,335,693 | ||||
| July 1, 2022 | 42,900 | 46,749 | [3] | 1,339,542 | ||||
| Jan. 1, 2023 | 42,900 | 46,884 | [4] | [5] | ||||
| July 1, 2023 | 42,900 | 47,023 | 4,123 | 1,347,649 | ||||
| Jan. 1, 2024 | 42,900 | 47,168 | 4,268 |
What was the market interest rate when the bonds were issued? (Round answer to 0 decimal places, e.g. 52%.)
| Market interest rate | % |
| Jan. 1, 2021 | |||||
| (To record issuance of bonds.) | |||||
| July 1, 2021 | |||||
| (To record interest payment.) | |||||
| Dec. 31, 2021 | |||||
| (To accrue interest expense.) | CULLUMBER SATELLITES Balance Sheet (Partial) December 31, 2021For the Month Ended December 31, 2021For the Year Ended December 31, 2021 Intangible AssetsTotal Liabilities and Shareholders' EquityCurrent LiabilitiesTotal AssetsTotal Non-Current LiabilitiesTotal Current AssetsShareholders' EquityTotal Shareholders' EquityProperty, Plant and EquipmentCurrent AssetsTotal Intangible AssetsTotal Current LiabilitiesNon-Current LiabilitiesTotal Property, Plant and EquipmentTotal Liabilities $ Current LiabilitiesShareholders' EquityTotal Current LiabilitiesTotal LiabilitiesTotal Intangible AssetsTotal Current AssetsTotal Property, Plant and EquipmentIntangible AssetsNon-Current LiabilitiesProperty, Plant and EquipmentTotal Shareholders' EquityTotal Non-Current LiabilitiesTotal Liabilities and Shareholders' EquityCurrent AssetsTotal Assets $ |
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Auditing and Assurance services an integrated approach
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley
14th Edition
133081605, 132575957, 9780133081602, 978-0132575959
