FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- 7barrow_forwardeBook G Calculator Print Item Compute Bond Proceeds, Amortizing Discount by Interest Method, and Interest Expense Lewis Co. produces and sells aviation equipment. On the first day of its fiscal year, Lewis Co. issued $30,000,000 of three-year, 10% bonds at a market (effective) interest rate of 12%, with interest payable semiannually. Compute the following: a. The amount of cash proceeds from the sale of the bonds. Use the tables of present values in Exhibit 8 and Exhibit 10. Round to the nearest dollar. b. The amount of discount to be amortized for the first semiannual interest payment period, using the interest method, Round to the nearest dollar. c. The amount of discount to be amortized for the second semiannual interest payment period, using the interest method. Round to the nearest dollar. d. The amount of the bond interest expense for the first year. Round to the nearest dollar. Previous Next Check My Work 3 more Check My Work uses remaining. 1. 0V 11:24 %24 %24 %24arrow_forwardNeed help with #28arrow_forward
- Please don't provide answer in image format thank youarrow_forwardDon't give answer in imagearrow_forwardWhat account would be debited (1), what account would be credit (2), and what amount would be paid to record the journal entry for each interest payment based on a $200,000 five-year, 10% bond and the bond was issued at $192,462 (11%) and interest is paid semiannually? JOURNAL Page 25 DATE DESCRIPTION P.REF. DEBIT CREDIT (1) ? (2) ? (1) Interest Expense debit $11,000, and (2) Cash credit $11,000 (1) Interest Expense debit $10,000 and (2) Cash credit $10,000 (1) Cash debit $20,000 and (2) Interest Expense credit $20,000 (1) Cash debit $22,000, and (2) Interest Expense credit $22,000arrow_forward
- Question 5 Company ABC, Co issued bonds at a premium and reports interest expense with the effective interest method. At each subsequent interest payment date, the cash interest paid is: A) Not Equal to the effective interest. B) Equal to the effective interest. C) Not Always the same dollar amount O A O B O C Drovieu MacBook Air F1 F2 F3 F4 F5 F6 F 7 23 24 3 4 & 7 Q E R T A F G H C V Barrow_forwardHow to calculate Pmt and FVarrow_forwardBrief Exercise 10-08 Metlock, Inc. issues $264,000, 10-year, 10% bonds at 99. Prepare the journal entry to record the sale of these bonds on March 1, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Enter an account title enter a debit amount enter a credit amount Enter an account title enter a debit amount enter a credit amount Enter an account title enter a debit amount enter a credit amountarrow_forward
- eBook Reporting Issuance and Retirement of Long-Term Debt On the basis of the details of the following bonds payable and related discount accounts, indicate the items to be reported in the Financing Activities section of the statement of cash flows, assuming no gain or loss on retiring the bonds: ACCOUNT Bonds Payable Jan. Date June Item Debit 1980 Retire bonds 76,000 Jan. Item Date 30 ACCOUNT Discount on Bonds Payable 1 June 30 Dec. 31 2 Issue bonds Retire bonds Balance Issue bonds Print Item Item Balance Retire bonds Issue bonds Amortize discount Amortization of discount Debit Check My Work 2 more Check My Work uses remaining. 15,300 Credit 228,000 Credit 6,080 1,320 ACCOUNT NO. Debit Section of Statement of Cash Flows Balance Debit Credit ACCOUNT NO. 380,000 304,000 532,000 Balance 17,100 11,020 26,320 25,000 Credit Added or Deducted $ Amount Previous Nextarrow_forwardInstructions Present Value Tables Chart of Accounts Journal Final Questions Instructions Campbell Inc. produces and sells outdoor equipment. On July 1, Year 1, Campbell Inc. issued $60,400,000 of 10-year, 12% bonds at a market (effective) interest rate of 11%, receiving cash of $64,009,069. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.* 2. Journalize the entries to record the following:* a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar.) 3. Determine the total interest expense for Year 1. 4. Will the bond proceeds always be…arrow_forwardeBook Calculator Print Item ACCOUNT Bonds Payable ACCOUNT No. Balance Date Item Debit Credit Debit Credit Jan. Balance 400,000 2. Retire bonds 80,000 320,000 June 30 Issue bonds 240,000 560,000 ETA ACCOUNT Discount on Bond Payable ACCOUNT NO. Balance Date Item Debit Credit Debit Credit ET Jan. 1. Balance 18,000 2. Retire bonds 6,400 11,600 June 30 Issue bonds 16,100 27,700 ETA Amortize discount Dec. 31 1,390 26,310 Item Section of Statement of Cash Flows Added or Deducted Amount Retire bonds ETA.. Issue bonds ETA Amortization of discount Check My Work 3 more Check My Work uses remaining. Previous Next 12:27arrow_forward
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