P12-2 E,F,G,H

Interest Expense Decrease Cash Payment 523 1/1/2003 2/1/2003 V2003 4/1/2003 wers to the nearest C Prepare the journal entry to record the mortgage. Round answer Prepare the entry for the first payment. What will be the total interest paid over the life of the mortgage? njannual coupon bon ket value of the bon wy 1 of each year. P12-2 On lanuary 1, 2004, Gerry Corporation issued $10,000,000 89% semian The bonds were issued at face value. By December 31, 2006, the market had fallen to $9,875,200. Interest payment dates are January I and July 1 Required: 2. Prepare the entry to record the sale of the bonds on January 1, 2004. b. Prepare the entry made on the first coupon payment date of July 1, 2004 c. What will the book value of the bonds be on December 31, 2006? d. What factors would have caused the market value of the bonds to fall belo value? Explain. o fall below the face c. What accounting adjustment would Gerry be required to make on Dec 2006? make on December 31, . Assume that Gerry retires the bonds on December 31, 2006, by buying the bonde the open market. What journal entry would be made to retire the bonds? & Indicate the impact of the bond retirement on Gerry's net income and debt-to. equity ratio. h. Explain why management may sometimes retire bonds when it is not in the best in terest of the company's stockholders. ae balance sheet and income statement of Coca-Cola Company and Subsidiaries at De anber 31, 1999, are as follows: Coca-Cola Company and Subsidiaries Income Statement (in millions) merating revenues goods sold For the Year Ended 12/31/99 rofit administra $19 805