Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please do all sections Mellilo Corporation issued $6.0 million of 20-year, 9.5 percent bonds on July 1, 2021, at 98 . Interest is due on

please do all sections image text in transcribed
image text in transcribed
Mellilo Corporation issued $6.0 million of 20-year, 9.5 percent bonds on July 1, 2021, at 98 . Interest is due on June 30 and December 31 of each year, and all of the bonds in the issue mature on June 30,2041 . Mellilo's fiscal year ends on December 31. Prepare the following journal entries. a. July 1, 2021, to record the issuance of the bonds. b. December 31, 2021, to pay interest and amortize the bond discount. c. June 30, 2041, to pay interest, amortize the bond discount, and retire the bonds at maturity (make two separate entries). d. What is the effect of amortizing the bond discount upon (1) annual net income and (2) annual net cash flow from operating activities, (Ignore possible income tax effects.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars not in millions.) Complete this question by entering your answers in the tabs below. a. July 1,2021 , to record the issuance of the bonds. b. December 31,2021 , to pay interest and amortize the bond discount. c. June 30, 2041, to pay interest, amortize the bond discount, and retire the bonds at maturity (make two separate entries). Journal entry worksheet Shown are data from recent reports of two toy makers. Dollar amounts are stated in thousands. a-1. Compute debt ratio for each company. a-2. Compute interest coverage ratio for each company. b. In your opinion, which of these companies would a long-term creditor probably view as the safer investment? Complete this question by entering your answers in the tabs below. Compute Interest coverage ratio for each company. (Round your answers to 2 decimal places.)

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

Behind Closed Doors What Company Audit Is Really About

Authors: V. Beattie, R. Brandt, S. Fearnley

2001 Edition

0333747844, 978-0333747841

More Books

Students also viewed these Accounting questions