Knowledge Check 01 On January 1, Year 1, Zeta Corporation issues $100,000 of 8% bonds maturing in 10 years, when the market rate of interest is 9%. Market interest rates drop to 7% by December 31, Year 1. The company retires the bonds on December 31, Year 1 by paying $106,595. The carrying value of the bonds as of this date is $93,920. The journal entry for retirement of the bonds will include a: Multiple Choice credit to Discount on Bonds Payable for $6,080 debit to Premium on Bonds Payable for $6,080 debit to Premium on Bonds Payable for $6,595 credit to Discount on Bonds Payable for $6,595

Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows fro…

A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the …

Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It…

Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expect…