FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Problem 14-2 (Algo) Effective interest; financial statement effects [LO14-2]
On January 1, 2021, Baddour, Inc., issued 10%, 12 year bonds with a face amount of $164 million. The bonds were priced at $144 million
to yield 12%. Interest is paid semlannually on June 30 and December 31. Baddour's fiscal year ends September 30.
Required:
1. What amount(s) related to the bonds would Baddour report in its balance sheet at September 30, 2021?
2 What amount(s) related to the bonds would Baddour report in its income statement for the year ended September 30, 2021?
3. What amount(s) related to the bonds would Baddour report in its statement of cash flows for the year ended September 30, 2021? In
which section(s) should the amount(s) appear?
(For all requirements, enter your answers in whole dollars.)
1.
Net bonds payable
Interest payable
2 Interest expense for fiscal 2021
3. Sale of bonds
Cash interest paid
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Transcribed Image Text:Problem 14-2 (Algo) Effective interest; financial statement effects [LO14-2] On January 1, 2021, Baddour, Inc., issued 10%, 12 year bonds with a face amount of $164 million. The bonds were priced at $144 million to yield 12%. Interest is paid semlannually on June 30 and December 31. Baddour's fiscal year ends September 30. Required: 1. What amount(s) related to the bonds would Baddour report in its balance sheet at September 30, 2021? 2 What amount(s) related to the bonds would Baddour report in its income statement for the year ended September 30, 2021? 3. What amount(s) related to the bonds would Baddour report in its statement of cash flows for the year ended September 30, 2021? In which section(s) should the amount(s) appear? (For all requirements, enter your answers in whole dollars.) 1. Net bonds payable Interest payable 2 Interest expense for fiscal 2021 3. Sale of bonds Cash interest paid
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