E10-9 (Algo) Indicating the Effects of a Premium Bond Issue and Interest Payment on the Financial Statements [LO 10-3] Grocery Corporation received $330,360 for 11.00 percent bonds issued on January 1, 2021, at a market interest rate of 8.00 percent. The bonds had a total face value of $275,000, stated that interest would be paid each December 31, and stated that they mature in 10 years. Required: Prepare the following table for each account by indicating (a) whether it is reported on the Balance Sheet (B/S) or Income Statement (VS): (b) the dollar amount by which the account increases, decreases, or does not change when Grocery Corporation issues the bonds; and (c) the direction of change in the account [increase, decrease, or no change) when Grocery Corporation records the interest payment on December 31.
E10-9 (Algo) Indicating the Effects of a Premium Bond Issue and Interest Payment on the Financial Statements [LO 10-3] Grocery Corporation received $330,360 for 11.00 percent bonds issued on January 1, 2021, at a market interest rate of 8.00 percent. The bonds had a total face value of $275,000, stated that interest would be paid each December 31, and stated that they mature in 10 years. Required: Prepare the following table for each account by indicating (a) whether it is reported on the Balance Sheet (B/S) or Income Statement (VS): (b) the dollar amount by which the account increases, decreases, or does not change when Grocery Corporation issues the bonds; and (c) the direction of change in the account [increase, decrease, or no change) when Grocery Corporation records the interest payment on December 31.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 15MCQ
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