p15-7A

p t amvert the bonds into commem share, ne market interest rate wa. 4% ace value. The bonds nually on Deemb hhe features of these bonds the price of the boels and recond the bond s an edfiective interest amoietiotab o Round ans to the earest la entries have been se the first three interesl pymming reversing entes these bond HER Landon Colton, thhe owner of Colon Cars Co, wants ir why a hoard of director of sue when h uthorlsbod Herron does not KING IT interest rate al the market Interest ate on the dale aet the contractual that, If the contractual Interes e as et at the market e, then hase t at a premium or discount. Explain this to Landon wor honds Calculate effectivera Excel or a Bimancial cal and record bond trans 123,4) AP n s The bonds pay interest o day 1. MEMb year end is April 30 rcond the ssue of the bonds on May 1. 2017. s pay semi-anmeal aa the effective rate of the bonds using Excel or a financial calculator Prepare o e Presnd the accrual of interest at April 30. 3018 an effective interest amortlzation table for this bond Bond the interest payment on May 1, 2018 sdjusting entry relating to these Recond the instead that MEM has a December 31, 2017, year end, prepare the 0 Ass and the sabsequent interest payment on May 1, 2018 1,300,514 1,304,032 1.307,673 ,311,442 se that on May 1, 2018, afte redemption of the bonds. er payment of the interest, MEM redeems all of the bonds at 104 IT FURTHER Why would MEM elect to redeem the boeds earlyt On July 1, 2017, Welhancer Corp. issued $4 million of 10-year, 5% bonds at4327A29. This price Record bond tri on July 1 and January 1, (LO 2,3,4) AP Is) 319,379 323,557 Padina 4% market interest rate on the bond. The bonds pay semiannual interest ewibhancer has a December 31 year end. Record the issue of the bonds on July 1, 2017, Prepare an effective interest amortization table for the first five Interest payments for these bonds Round amounts to the nearest dollar ) Record the accrual of interest at December 31, 2017, and the subsequent payment on lanuary 4) Assaming instead that Webhancer has an August 31 year end, prepare the adjusting enti ry related to these bonds on August 31, 2017, as well as the subsequent interest payment on Janaary 1, 2018 IA NOIT FURTHER Assuming that the bonds were issued at a market interest rate of 6%, calculate the issue price of the bonds PIS-7A On January I, 2017, Alberta Hydro Ltd. isued bonds with a maturity value of $8 million when the market ratr ofinterest was 4%. The bonds have a coupon (contractual) interest ost on the bonds is payable semi-annually on July 1 and January 1 of each year The company's year end is Record bor including ember 31, show bala presentat rate of 5% and mature on lanuary 1, 2027, Inter- ate at the APTER 15 Non-Current Liabilities PIS-11A help finan (a) Calculate the issoe price of the bonds (b) Prepare a bond amortization schedule from the date of issue up to and including January 1, 201 Instructic (c) Prepare all of the required journal entries related to the bonds that Alberta Hydro will record incleding any adjusting journal entries at December 31, 2017 (a) Prep dolla (b) Reco (c) Show (d) What amounts would be reported as current and non-current in the liabilities section of Alberta December 31, 2017, balance sheet? (e) Record the payment of interest on January 1, 2018. t0 The bonds were redemed on January 1,2019 (after the interest had been paid and recorded) at I Rem the journal entry for the redemption of the bonds. for the repayment of (d) Rece the bonds on January 1, 2027 th) What will be the total interest peyment over the 10-year life of the bonds? What will be the total inc TAKING blended expense over the 10-year life of the bonds? TAKING IT FURTHER Explain why the total interest payment over the 10-year life of the bonds is equal to o P15-12 diferent than the total interest expense over the 10-year life of the bonds. during Kersha. Electric sold S6 million of 10%, 10-year bonds on January 1, 2017. The bonds were dated record balance and bond 47) AP P15-8A January 1, 2017, and paid interest on January 1. The bonds were sold at 98. Lease Estim Yearly Fair r Prese (a) Prepare the journal entry to record the issuance of the bonds on January 1, 2017. (b) Assume that at December 31, 2017, 58,000 of the discount has been amortized. Show the balance sheet pre sentation of the non-current liability at December 31, 2017. (o) Assume that on January 1, 2019, when the bonds' amortized cost was $5,896,000, the company redeemed the boads at 102. Record the redemption of the bonds assuming that interest for the period had already been paid TAKING IT FURTHER (b) at a premium Instr (a) V How will the total cost of borrowing be affected if a bond is sold (a) at a discount and ment PIS-9A A local company as jus pproached a venture capitalis for financing to develop a sk hill. On April 1.307, (c) 1 the venture capitalist lent the company Si million at an interest rate of 5%. The loan is repayable over four years into principal payments The first payment is due March 31, 2018.The ski hill operators year end will be December 1. n. Instructions (a) Record the issue of the note payable on April 1, 2017. b) Calculate the amount of the fixed principal payment. (c) Prepare an instalment payment schedule. IAK 201 inst (d) Record the accrual of interest on December 31,2017, and the instalment payment on March 31,20 e) What amounts would be reported as current and non-current in the liabilities section of the PIs December 31, 2017, balance sheet? (f) Record the accrual of interert