Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please solve all the questions. E14-6 (Amortization Schedule) Spencer Company sells 10% bonds having a maturity value of 3,000,000 for 2,783,724. The bonds are dated
Please solve all the questions.
E14-6
(Amortization Schedule) Spencer Company sells 10% bonds having a maturity value of 3,000,000 for 2,783,724. The bonds are dated January 1, 2015, and mature January 1, 2020. Interest is payable annu- ally on January 1. Instructions
Set up a schedule of interest expense and discount amortization. (Hint: The effective-interest rate must be computed.)
E14-16
(Entries for Retirement and Issuance of Bonds) Kobiachi Company had bonds outstanding with a maturity value of 5,000,000. On April 30, 2016, when these bonds had an unamortized discount of 100,000, they were called in at 104. To pay for these bonds, Kobiachi had issued other bonds a month ear- lier bearing a lower interest rate. The newly issued bonds had a life of 10 years. The new bonds were issued at 103 (face value 5,000,000).
Instructions
Ignoring interest, compute the gain or loss and record this refunding transaction.
E14-19
(Loan Modification) Use the same information as in E14-18 except that Sterling Bank reduced the principal to 1,900,000 rather than 2,400,000. On January 1, 2019, Barkley pays 1,900,000 in cash to Sterling Bank for the principal.
Instructions
(a) Prepare the journal entries to record the loan modification for Barkley.
(b) Prepare the amortization schedule of the note for Barkley Company after the debt modification.
(c) Prepare the interest payment entries for Barkley Company on December 31 of 2016, 2017, and 2018.
(d) What entry should Barkley make on January 1, 2019?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started