Problem 14-10

Presented below are four independent situations. (a) On March 1, 2018, Marin Co. issued at 103 plus accrued interest $3,910,000, 9% bonds. The bonds are dated January 1, 2018, and pay interest semiannually on July 1 and January 1. In addition, Marin Co. incurred $28,000 of bond issuance costs. Compute the net amount of cash received by Marin Co. as a result of the issuance of these bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.)

Net amount of cash received

$

(b) On January 1, 2017, Headland Co. issued 9% bonds with a face value of $709,000 for $625,487 to yield 11%. The bonds are dated January 1, 2017, and pay interest annually. What amount is reported for interest expense in 2017 related to these bonds, assuming that Headland used the effective-interest method for amortizing bond premium and discount? (Round answer to 0 decimal places, e.g. 38,548.)

Interest expense to be reported for 2017

$

(c) Sage Building Co. has a number of long-term bonds outstanding at December 31, 2017. These long-term bonds have the following sinking fund requirements and maturities for the next 6 years.

		Sinking Fund		Maturities
2018		$304,000		$106,000
2019		106,000		273,000
2020		106,000		106,000
2021		218,000		-
2022		218,000		139,000
2023		218,000		106,000

Indicate how above information should be reported in the financial statements at December 31, 2017. (Round answers to 0 decimal places, e.g. 38,548.)

Maturities and sinking fund requirements
2018		$
2019		$
2020		$
2021		$
2022		$
Thereafter		$

(d) In the long-term debt structure of Pronghorn Inc., the following three bonds were reported: mortgage bonds payable $10,018,000; collateral trust bonds $4,999,000; bonds maturing in installments, secured by plant equipment $3,964,000. Determine the total amount, if any, of debenture bonds outstanding.

Total amount

$