Problem: Module 3 Textbook Problem 7 Learning Objective: 3-7 Using the straight-line method show how bonds issued at a premium affect financial statements The Square Foot Grill, Inc. Issued $198,000 of 10-year, 8 percent bonds on January 1, Year 1, at 102. Interest is payable in cash annually on December 31. The straight-line method is used for amortization. Required a. Use a financial statements model like the one shown below to demonstrate how (1) the January 1, Year 1, bond issue and (2) the December 31, Year 1, recognition of interest expense, including the amortization of the premium and the cash payment, affects the company's financial statements. Use + for increase, - for decrease, and if there is no effect, leave the cell blank. b. Determine the carrying value (face value less discount or plus premium) of the bond liability as of December 31, Year 1. c. Determine the amount of interest expense reported on the Year 1 income statement. d. Determine the carrying value of the bond liability as of December 31, Year 2. e. Determine the amount of interest expense reported on the Year 2 income statement. Complete this question by entering your answers in the tabs below. Req A Req B to E Use a financial statements model like the one shown below to demonstrate how (1) the January 1, Year 1, bond issue and (2) the December 31, Year 1, recognition of interest expense, including the amortization of the premium and the cash payment, affects the company's financial statements. Use + for increase, for decrease, and if there is no effect, leave the cell blank. (In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA) and if there is no effect, leave the cell blank. Not all cells will require entry.) Show less A SQUARE FOOT GRILL, INC. Effect of Transactions on Financial Statements Balance Sheet Income Statement Event No. Statement of Assets =Liabilities Stockholders' Equity Revenue Expense Net Income Cash Flow 1. 28. 2b. +

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What does the term "no mutual agency" mean

Zina Manufacturing Company started and completed Job 501 in December with the following Job Cost Sheet and transferred it to the warehouse. Direct Materials Date Dec 17 Dec 30 Total Direct Labor Amount Date Amount $2,000 Dec 20 $4,000 8,000 Dec 30 3,800 Total Job Cost Sheet - Job No. 501 Total Cost The journal entry to record the transaction is A) WIP Inventory FG Inventory B) Cost of Goods Sold WIP Inventory C) FG Inventory WIP Inventory D) FG Inventory WIP Inventory Debit Credit 35,800 17,800 17,800 Manufacturing Overhead Date Amount Dec 24 $10,000 Dec 30 8,000 Total 35,800 35,800 17,800 17,800 35,800