Tableau DA 10-2: Exercise, Recording bond issuance and amortization LO P2 The founder of Frenza asks us to assist her in accounting and analysis of the corporation's bonds, which have an annual contract rate of 8% She wants to know the business and accounting implications of further debt issuaances as she looks for ways to finance the growth of Frenza. The following Tableau Dashboard is provided to help us address her questions and provide recommendations for her business decisions. Carrying Value Frenza Bond Amortization Unamortized Discount $100,000 $80,000 $60,000 $40,000 $20,000 $0 January 1, Year June 30, Year 1 December 31, June 30, Year 2 December 31, June 30, Year 3 December 31, Year 1 Year 2 1 Year 3 Market Rate for Company Bonds Cash & Inventory for Competing Companies 10% Frenza Lika Nelo Frenza 8% $50,000 Lika 6% $40,000 4% Nelo $30,000 26 $20,000 09% $10,000 Total Equity & Net Income Frenza Lika Nelo $0 $100,000 $190,000 Net Income $85,000 Total Equity $400,000 $530,000 $275,000 ableau Cash Invent ory se ysep Invent ory 1(a). Prepare journal entries to record the issuance of Frenza bonds on January 1, Year 1. 1b). Prepare journal entries to record the first and second Interest payments on June 30, Year 1, and December 31, Year 1 1c Prepare Journel entries to record the maturty of the bonds on December 31, Year 3 2 Frenzs needs to ralse maney to purchase new equipment. The founder s concerned about losing ownershlp control of her company. Which off the following ways to ralse money would we recommend 3. Frenzs needs to ralse maney to purchase more Inventory. The founder is concermed about the company's sbilty to make required cash payments when ceah flows are low. Which of the follawing ways to ralse money wauld we recommend Complete this question by entering your answers in the tabs below. quired 1ARaquired 18Raquird 1C Required 2 quired 3 Prepare journal entries to record the issuance of Frenza bonds on January 1, Year 1 Viw tramawchon Inst Journal entry worksheet Record the issuance af the bonds on January 1, Year 1 Note: Enter debits before credits Debit Credit Date Genaral Journsal Jan 01 Hecond wndrY Cler wnry Vgunralournal Required 1A Required 1B Required 1C Required 2 Required 3 Prepare journal entries to record the first and second interest payments on June 30, Year 1, and December 31, Year 1. View transaction list Journal entry worksheet 1 2 Record the semiannual interest payment and amortization on June 30, Year 1 Note: Enter debits before credits Date General Journal Debit Credit Jun 30 1 of 1 Prev Required 1A Required 2 Required 1B Required 1C Required 3 Prepare journal entries to record the first and second interest payments on June 30, Year 1, and December 31, Year 1. View transaction list Journal entry worksheet 2 Record the semiannual interest payment and amortization on December 31, Year 1 Note: Enter debits before credits Date General Journal Debit Credit Dec 31 1 of 1 Next Prev Complete this question by entering your answers in the tabs below. Required 1C Required 2 Required 1A Required 1B Required 3 Frenza needs to raise money to purchase new equipment. The founder is concerned about losing ownership control of her company. Which of the following ways to raise money would we recommend? (Select all that apply.) Issue bonds Issue a note to a bank |Issue common stock | Reissuing treasury stock Required 3 Required 1C Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 1c Required 2 Required 3 Frenza needs to raise money to purchase more inventory. The founder is concerned about the company's ability to make required cash payments when cash flows are low. Which of the following ways to raise money would we recommend? (Select all that apply.) |Issue bonds |Issue a note to a bank |Issue common stock Issue preferred stock Required 2 Required 3 Tableau DA 10-2: Exercise, Recording bond issuance and amortization LO P2 The founder of Frenza asks us to assist her in accounting and analysis of the corporation's bonds, which have an annual contract rate of 8% She wants to know the business and accounting implications of further debt issuaances as she looks for ways to finance the growth of Frenza. The following Tableau Dashboard is provided to help us address her questions and provide recommendations for her business decisions. Carrying Value Frenza Bond Amortization Unamortized Discount $100,000 $80,000 $60,000 $40,000 $20,000 $0 January 1, Year June 30, Year 1 December 31, June 30, Year 2 December 31, June 30, Year 3 December 31, Year 1 Year 2 1 Year 3 Market Rate for Company Bonds Cash & Inventory for Competing Companies 10% Frenza Lika Nelo Frenza 8% $50,000 Lika 6% $40,000 4% Nelo $30,000 26 $20,000 09% $10,000 Total Equity & Net Income Frenza Lika Nelo $0 $100,000 $190,000 Net Income $85,000 Total Equity $400,000 $530,000 $275,000 ableau Cash Invent ory se ysep Invent ory 1(a). Prepare journal entries to record the issuance of Frenza bonds on January 1, Year 1. 1b). Prepare journal entries to record the first and second Interest payments on June 30, Year 1, and December 31, Year 1 1c Prepare Journel entries to record the maturty of the bonds on December 31, Year 3 2 Frenzs needs to ralse maney to purchase new equipment. The founder s concerned about losing ownershlp control of her company. Which off the following ways to ralse money would we recommend 3. Frenzs needs to ralse maney to purchase more Inventory. The founder is concermed about the company's sbilty to make required cash payments when ceah flows are low. Which of the follawing ways to ralse money wauld we recommend Complete this question by entering your answers in the tabs below. quired 1ARaquired 18Raquird 1C Required 2 quired 3 Prepare journal entries to record the issuance of Frenza bonds on January 1, Year 1 Viw tramawchon Inst Journal entry worksheet Record the issuance af the bonds on January 1, Year 1 Note: Enter debits before credits Debit Credit Date Genaral Journsal Jan 01 Hecond wndrY Cler wnry Vgunralournal Required 1A Required 1B Required 1C Required 2 Required 3 Prepare journal entries to record the first and second interest payments on June 30, Year 1, and December 31, Year 1. View transaction list Journal entry worksheet 1 2 Record the semiannual interest payment and amortization on June 30, Year 1 Note: Enter debits before credits Date General Journal Debit Credit Jun 30 1 of 1 Prev Required 1A Required 2 Required 1B Required 1C Required 3 Prepare journal entries to record the first and second interest payments on June 30, Year 1, and December 31, Year 1. View transaction list Journal entry worksheet 2 Record the semiannual interest payment and amortization on December 31, Year 1 Note: Enter debits before credits Date General Journal Debit Credit Dec 31 1 of 1 Next Prev Complete this question by entering your answers in the tabs below. Required 1C Required 2 Required 1A Required 1B Required 3 Frenza needs to raise money to purchase new equipment. The founder is concerned about losing ownership control of her company. Which of the following ways to raise money would we recommend? (Select all that apply.) Issue bonds Issue a note to a bank |Issue common stock | Reissuing treasury stock Required 3 Required 1C Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 1c Required 2 Required 3 Frenza needs to raise money to purchase more inventory. The founder is concerned about the company's ability to make required cash payments when cash flows are low. Which of the following ways to raise money would we recommend? (Select all that apply.) |Issue bonds |Issue a note to a bank |Issue common stock Issue preferred stock Required 2 Required 3