q 19,20,21

on 19 4 pts On January 1, 2012 ABC, Inc. issued 20,000 10-year bonds (par value of $1,000 each), with an 8% coupon rate, and interest paid semiannually (twice a year). The first payment is scheduled to occur on June 30th. At the time of the bond issuance, the market rate for a similar debt security was currently yielding 6%. ABC, Inc. becomes more credit worthy over the first 2 years after the initial bond issuance, and the market is now (1/1/2014) demanding an interest rate of only 4%. What is the journal entry that ABC, Inc. would record on 1/1/2012? Edit View Insert Format Tools Table your best Maps Translate chapter 2 manage Question 21 4 pts CycleShop sells bicycles and offers a manufacturer two-year warranty on all bike's sold, beginning the month after sale. They begin 2013 with $55,000 in their "Warranty Payable account. Throughout 2013 CycleShop sells $2,000,000 worth of bikes, and incur warranty related repair costs equal to $20,000. At the end of December 2013 they estimate the following warranty related repairs for the next 2 years, based on the bike's they have sold in 2013: 2014 Estimated Loss Probability $40,000 40% $30,000 60% 2015 Estimated Loss Probability $20,000 40% $10,000 60% Assume that CycleShop (1) uses a 5% discount factor to compute present values, (2) that all repairs are assumed to occur at the end of the year, and (3) they use the expected cash flows approach to determine their current period warranty expense, how much warranty expense should CycleShop record in 2013? Maps 3 Translate chapter 2 manage Question 20 4 pts On January 1, 2012 ABC, Inc. issued 20,000 10-year bonds (par value of $1,000 each), with an 8% coupon rate, and interest paid semiannually (twice a year). The first payment is scheduled to occur on June 30th. At the time of the bond issuance, the market rate for a similar debt security was currently yielding 6%. ABC, Inc. becomes more credit worthy over the first 2 years after the initial bond issuance, and the market is now (1/1/2014) demanding an interest rate of only 4%. If ABC, Inc. decides to retire the bond early by purchasing it back via the bond market on January 1. 2014, how would they account for this transaction (assume they retire the bond for cash, and the bonds have an unrestricted call feature)