Wempe Co. sold $3,059,000,8%,10-year bonds on January 1, 2014. The bonds were dated January 1, 2014, and pay interest on January 1. The company uses straight-line amortization on bond premiums and discounts. Financial statements are prepared annually.

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Your answer is partially correct.Try again.Prepare the journal entries to record the issuance of the bonds assuming they sold at: (1)103and (2)95. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.

Date

Account Titles and Explanation

Debit

Credit

1.1/1/14 Cash

3,150,770

Bonds Payable

3,059,000

Premium on Bonds Payable

91,770

2.1/1/14 Cash

2,906,050

Discount on Bonds Payable

152,950

Bonds Payable

3,059,000

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Your answer is partially correct.Try again.Prepar amortization tables for issuance of the bonds sold at103for the first three interest payments.

Annual

Interest

Periods

Interest to

Be Paid

Interest Expense

to Be Recorded

Premium

Amortization

Unamortized

Premium

Bond

Carrying Value

Issue date$

$

$

$91,700

$3,150,770

1244,720

235,543

9177

82,523

3,141,593

2244,720

235,543

9177

73,346

3,132,416

3244,720

235,543

9177

64,169

3,123,239

Prepar amortization tables for issuance of the bonds sold at95for the first three interest payments.

Annual

Interest

Periods

Interest to

Be Paid

Interest Expense

to Be Recorded

Premium

Amortization

Unamortized

Premium

Bond

Carrying Value

Issue date$

$

$

$152,950

$2,906,050

1244,720

260,015

15,295

137,655

2,921,345

2244,720

260,015

15,295

122,360

2,936,640

3244,720

260,015

15,295

106,435

2,952,565

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Your answer is correct. Prepare the journal entries to record interest expense for 2014 under both of the bond issuances assuming they sold at: (1)103and (2)95. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.

Date

Account Titles and Explanation

Debit

Credit

1.12/31/14 Interest Expense

235,543

Premium on Bonds Payable

9177

Interest Payable

244,720

2.12/31/14 Interest Expense

260,015

Discount on Bonds Payable

15,295

Interest Payable

244,720

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Your answer is partially correct.Try again.Show the long-term liabilities balance sheet presentation for issuance of the bonds sold at103at December 31, 2014.

WEMPE Co.

Balance Sheet (Partial)

December 31, 2014

Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentRevenuesStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders' Equity

res_EAT_1350491387935_0_5559394775688391_159

Bonds Payable

$3,059,000

LessAdd

res_EAT_1350491387935_0_5559394775688391_181

: Premium on Bonds Payable

82,523

$3,141,523

Show the long-term liabilities balance sheet presentation for issuance of the bonds sold at95at December 31, 2014.

WEMPE Co.

Balance Sheet (Partial)

December 31, 2014

Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentRevenuesStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders' Equity

res_EAT_1350491387935_0_5559394775688391_194

Bonds Payable

$3,059,000

LessAdd

res_EAT_1350491387935_0_5559394775688391_215

: Discount on Bonds Payable

137,655

$2,921,345

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The financial statements of Tootsie Roll are presented below. TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share data) For the year ended December 31, 2011 2010 2009 Net product sales $528,369 $517,149 $495,592 Rental and royalty revenue 4,136 4,299 3,739 Total revenue 532,505 521,448 499,331 Product cost of goods sold 365,225 349,334 319,775 Rental and royalty cost 1,038 1,088 852 Total costs 366,263 350,422 320,627 Product gross margin 163,144 167,815 175,817 Rental and royalty gross margin 3,098 3,211 2,887 Total gross margin 166,242 171,026 178,704 Selling, marketing and administrative expenses 108,276 106,316 103,755 Impairment charges 14,000 Earnings from operations 57,966 64,710 60,949 Other income (expense), net 2,946 8,358 2,100 Earnings before income taxes 60,912 73,068 63,049 Provision for income taxes 16,974 20,005 9,892 Net earnings $43,938 $53,063 $53,157 Net earnings $43,938 $53,063 $53,157 Other comprehensive earnings (loss) (8,740) 1,183 2,845 Comprehensive earnings $35,198 $54,246 $56,002 Retained earnings at beginning of year. $135,866 $147,687 $144,949 Net earnings 43,938 53,063 53,157 Cash dividends (18,360) (18,078) (17,790) Stock dividends (47,175) (46,806) (32,629) Retained earnings at end of year $114,269 $135,866 $147,687 Earnings per share $0.76 $0.90 $0.89 Average Common and Class B Common shares 57,892 58,685 59,425 outstanding (The accompanying notes are an integral part of these statements.) CONSOLIDATED STATEMENTS OF Financial Position TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in thousands except per share data) Assets December 31, 2011 2010 CURRENT ASSETS: Cash and cash equivalents $78,612 $115,976 Investments 10,895 7,996 Accounts receivable trade, less allowances of $1,731 and $1,531 41,895 37,394 Other receivables 3,391 9,961 Inventories: Finished goods and work-in-process 42,676 35,416 Raw materials and supplies 29,084 21,236 Prepaid expenses 5,070 6,499 Deferred income taxes 578 689 Total current assets 212,201 235,167 PROPERTY, PLANT AND EQUIPMENT, at cost: Land Buildings Machinery and equipment Construction in progress LessAccumulated depreciation Net property, plant and equipment OTHER ASSETS: Goodwill Trademarks Investments Split dollar officer life insurance Prepaid expenses Equity method investment Deferred income taxes Total other assets Total assets Liabilities and Shareholders' Equity CURRENT LIABILITIES: Accounts payable Dividends payable Accrued liabilities Total current liabilities NONCURRENT LIABILITES: Deferred income taxes Postretirement health care and life insurance benefits Industrial development bonds Liability for uncertain tax positions Deferred compensation and other liabilities Total noncurrent liabilities SHAREHOLDERS' EQUITY: Common stock, $.69-4/9 par value120,000 shares authorized 36,479 and 36,057 respectively, issued Class B common stock, $.69-4/9 par value40,000 shares authorized 21,025 and 20,466 respectively, issued Capital in excess of par value Retained earnings, per accompanying statement Accumulated other comprehensive loss Treasury stock (at cost)71 shares and 69 shares, respectively Total shareholders' equity Total liabilities and shareholders' equity 21,939 107,567 322,993 2,598 455,097 242,935 212,162 21,696 102,934 307,178 9,243 440,974 225,482 215,492 73,237 175,024 96,161 74,209 3,212 3,935 7,715 433,493 $857,856 73,237 175,024 64,461 74,441 6,680 4,254 9,203 407,300 $857,959 December 31, 2011 2010 $10,683 4,603 43,069 58,355 $9,791 4,529 44,185 58,505 43,521 26,108 7,500 8,345 48,092 133,566 47,865 20,689 7,500 9,835 46,157 132,046 25,333 25,040 14,601 14,212 533,677 114,269 (19,953) (1,992) 665,935 $857,856 505,495 135,866 (11,213) (1,992) 667,408 $857,959 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Cash Flows (in thousands) For the year ended December 31, 2011 2010 2009 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $43,938 $53,063 $53,157 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation Impairment charges Impairment of equity method investment Loss from equity method investment Amortization of marketable security premiums Changes in operating assets and liabilities: Accounts receivable Other receivables Inventories Prepaid expenses and other assets Accounts payable and accrued liabilities Income taxes payable and deferred Postretirement health care and life insurance benefits Deferred compensation and other liabilities Others Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures Net purchase of trading securities Purchase of available for sale securities Sale and maturity of available for sale securities Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Shares repurchased and retired Dividends paid in cash Net cash used in financing activities 19,229 194 1,267 18,279 342 522 17,862 14,000 4,400 233 320 (5,448) 3,963 (15,631) 5,106 84 (5,772) 2,022 2,146 (708) 50,390 717 (2,373) (1,447) 4,936 2,180 2,322 1,429 2,525 310 82,805 (5,899) (2,088) 455 5,203 (2,755) (12,543) 1,384 2,960 305 76,994 (16,351) (3,234) (39,252) 7,680 (51,157) (12,813) (2,902) (9,301) 8,208 (16,808) (20,831) (1,713) (11,331) 17,511 (16,364) (18,190) (18,407) (36,597) (22,881) (18,130) (41,011) (20,723) (17,825) (38,548) Increase (decrease) in cash and cash equivalents (37,364) 24,986 22,082 Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 115,976 $78,612 90,990 $115,976 68,908 $90,990 Supplemental cash flow information Income taxes paid $16,906 $20,586 Interest paid $38 $49 Stock dividend issued $47,053 $46,683 (The accompanying notes are an integral part of these statements.) $22,364 $182 $32,538 Answer the following questions. Don't show me this message again for the assignment What were Tootsie Roll's total current liabilities at December 31, 2011? (Enter amount in thousands.) $ Current liabilities as at December 31, 2011 What was the increase/decrease in Tootsie Roll's total current liabilities from the prior year? (Enter amount in thousands.) Change in current liabilities $ Don't show me this message again for the assignment How much were the accounts payable at December 31, 2011? (Enter amount in thousands.) $ Accounts payable Don't show me this message again for the assignment Cole Corporation issued $538,000, 8%, 22-year bonds on January 1, 2014, for $443,618. This price resulted in an effective-interest rate of 10% on the bonds. Interest is payable annually on January 1. Cole uses the effective-interest method to amortize bond premium or discount. Don't show me this message again for the assignment Prepare the schedule using effective-interest method to amortize bond premium or discount of Cole Corporation. (Round answers to 0 decimal places, e.g. 150.) Interest Periods Interest Expense to Be Recorded Interest to Be Paid $ Discount Amortization $ $ Unamortized Discount $ Bond Carrying Value $ Issue date 1 2 Don't show me this message again for the assignment Show List of Accounts Link to Text Prepare the journal entries to record the issuance of the bonds. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Don't show me this message again for the assignment Show List of Accounts Link to Text Prepare the journal entries to record the accrual of interest and the discount amortization on December 31, 2014. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Don't show me this message again for the assignment Show List of Accounts Link to Text Link to Text Prepare the journal entries to record the payment of interest on January 1, 2015. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Don't show me this message again for the assignment Show List of Accounts Nance Co. receives $332,700 when it issues a $332,700, 8%, mortgage note payable to finance the construction of a building at December 31, 2014. The terms provide for semiannual installment payments of $19,240 on June 30 and December 31. Don't show me this message again for the assignment Prepare the schedule using effective-interest method to amortize bond premium or discount of Nance Co. (Round answers to 0 decimal places, e.g. 125.) Semiannua l Interest Period Cash Payment Interest Expense $ Reduction of Principal $ Principal Balance $ $ Issue date 6/30/15 12/31/15 Don't show me this message again for the assignment Show List of Accounts Link to Text Prepare the journal entries to record the mortgage loan. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Don't show me this message again for the assignment Show List of Accounts Link to Text Prepare the journal entries to record the first two installment payments. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Don't show me this message again for the assignment