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Acct 551 Week 3

In: Business and Management

Submitted By tanya10
Words 533
Pages 3
Week 3 Homework
E14-3 (Entries for Bond Transactions) Presented below are two independent situations.
1
A 1/1/12 Cash 300,000 Bonds payable 300,000
B 7/1/12 Interest Expense 6,750 300,000*.09*3/12 Cash 6,750
C 12/31/12 Interest Expense 6,750 Interest Payable 6,750
2
A Cash 210,000 Bond payable 200,000 Interest Expense 10,000 200,000*.012*5/12
B Interest Expense 12,000 200,000*.12*6/12 Cash 12,000
C Interest Expense 12,000 Interest payable 12,000
E14-7 (Amortization Schedule—Effective-Interest) Assume the same information
Date Cash Paid Interest Expense Discount Amortized Carrying Bond
1/1/12 2,783,724
1/1/13 300,000 334,046.88 34,046.88 2,817,770.88
1/1/14 300,000 338,132.51 38,132.51 2,855,903.39
1/1/15 300,000 342,708.41 42,708.41 2,898,611.80
1/1/16 300,000 347,833.42 47,833.42 2,946,445.22
1/1/17 300,000 353,554.78 53,554.78 3,000,000.00
3,000,000*.10= 300,000
300,000*.62092=1,862,760
300,000*3.79079=1,137,237
1,862,760+1,137,237=2,999,997

E14-10 (Entries for Bond Transactions)
A Cash 860,651.79 Premium Payable 60,651.79 Bonds Payable 800,000
B
Date Cash Paid Interest Expense Amortized Premium Carrying Bond
1/1/12 860,651.79
1/1/13 96,000 86,065.18 9,934.82 850,716.97
1/1/14 96,000 85,071.70 10,928.30 850,716.97
1/1/15 96,000 83,978.87 12,021.13 827,767.54
1/1/16 96,000
1/1/17 96,000
C Interest Expense 86,065.18 Bonds Payable 9,934.82 Cash 96,000
E14-17 (Imputation of Interest) Presented below are two independent situations
A Zero-interest-bearing note 600,000 Discount * .71178 12% 3periods Recorded Land =427,068
B Cash 4,000,000 10% 4 period Discount Notes Payable 1,267, 960

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