Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PARTI- On November 1, 2020, your company issued $600,000 of 5 year 9% bonds when the market interest rate was 8%. The bonds pay interest

image text in transcribed
PARTI- On November 1, 2020, your company issued $600,000 of 5 year 9% bonds when the market interest rate was 8%. The bonds pay interest annually on October 31 each year. Your company uses the interest method of amortization. a. Calculate the bond selling price on November 1, 2020. Please show the factors you entered into your calculator or spreadsheet to calculate the amount. b. Prepare the bond entries from November 1, 2020 through December 31, 2021 (one year and two months), assuming your company's year ends on December 31 and your company does NOT make reversing entries on January 1. c. Based upon the entries in part b." indicate any current liabilities (and the balance in the current account) your company would report on the balance sheet on December 31, 2021 (the second year) d. Based upon the entries in part "." indicate any NONcurrent liabilities and the balance in the account) your company would report on December 31, 2021 (the second year) PART II - On November 1, 2020, your company borrowed $800,000 and issued a 5-year 9% note. The note pays principal and interest annually on October 31 each year. a. Calculate the amount of the annual payments for this note. Please show the factors you entered into your calculator or spreadsheet to calculate the amount. b. Prepare the entries for this note from November 1, 2020 through December 31, 2021 (one vear and two months), assuming your company's year ends on December 31 and your company does NOT make reversing entries on January 1. c. Based upon the entries in part "b." indicate any current liabilities and the balance in the current account) your company would report on the balance sheet on December 31, 2021 (the second year) d. Based upon the entries in part "6." indicate any NONcurrent liabilities and the balance in the account) your company would report on December 31, 2021 (the second year)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Accounting Course 2

Authors: Claudia B. Gilbertson

9th Edition

053844827X, 9780538448277

More Books

Students also viewed these Accounting questions

Question

Discuss the determinants of direct financial compensation.

Answered: 1 week ago