HORNGREN'S FINANCIAL & MANGERIAL ACCOUNT
7th Edition
ISBN: 9780136505273
Author: MILLER-NOBLES
Publisher: PEARSON
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Chapter 12, Problem 5QC
Nicholas Smith Fitness Gym has $700,000 of 20-year bonds payable outstanding. These bonds had a discount of $56,000 at issuance, which was 10 years ago. The company uses the
a. $672,000.
b. $644,000.
c. $700,000.
d. $728,000.
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Alan Smith Fitness gym has 200,000 of 20 year bonds payable outstanding. These bonds had a discount of 18000 at issuance, which was 10 years ago. The company uses the straight-line amortization method. The current carrying amount of these bonds payable is?
Nicholas Smith Fitness Gym has $700,000 of 20-year bonds payable outstanding. These bonds had a discount of $56,000 at issuance, which was 10 years ago. The company uses the straight-line amortization method. The current carrying amount of these bonds payable is
a. $672,000.
b. $644,000.
c. $700,000.
c. $700,000.
Gold Corp. uses the amortized cost method (effective interest method) when accounting for debt investments. During the year, it purchased$140,000of 4-year,8%bonds, when the market interest rate was10%.
1. Calculate the price of the bond. Assume the bonds paid interest annually.
2. Record the purchase of the bonds on July1,2021. And accrual of interest on December 31, 2021. And receipt of interest on July 1, 2022.
3 What is the bond's carrying value on December31,2022?
Chapter 12 Solutions
HORNGREN'S FINANCIAL & MANGERIAL ACCOUNT
Ch. 12 - Flipco signed a 10-year note payable on January 1,...Ch. 12 - Daniels's bonds payable carry a stated interest...Ch. 12 - A bond that matures in installments at regular...Ch. 12 - Prob. 4QCCh. 12 - Nicholas Smith Fitness Gym has 700,000 of 20-year...Ch. 12 - Prob. 6QCCh. 12 - Prob. 7QCCh. 12 - The debt to equity ratio is calculated as a. Total...Ch. 12 - Mike Gordon wishes to have 80,000 in five years....Ch. 12 - Prob. 10BQC
Ch. 12 - Prob. 1RQCh. 12 - What is an amortization schedule?Ch. 12 - What is a mortgage payable?Ch. 12 - What is a bond payable?Ch. 12 - What is the difference between the stated interest...Ch. 12 - When does a discount on bonds payable occur?Ch. 12 - When does a premium on bonds payable occur?Ch. 12 - When a bond is issued, what is its present value?Ch. 12 - Why would a company choose to issue bonds instead...Ch. 12 - Prob. 10RQCh. 12 - Prob. 11RQCh. 12 - What is the normal balance of the account Discount...Ch. 12 - Prob. 13RQCh. 12 - Prob. 14RQCh. 12 - Prob. 15RQCh. 12 - Prob. 16RQCh. 12 - Prob. 17RQCh. 12 - Prob. 18ARQCh. 12 - Prob. 19ARQCh. 12 - Prob. 20ARQCh. 12 - Prob. 21BRQ
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Eli Inc. issued $100,000 of 8% annual, 5-year bonds for $103,000. What is the total amount of interest expense over the life of the bonds?arrow_forwardIrving Inc. sold bonds with a $50,000, 10% interest, and 10-year term at $52,000. What is the total amount of interest expense over the life of the bonds?arrow_forwardStarmount Inc. sold bonds with a $50,000 face value, 12% interest, and 10-year term at $48,000. What is the total amount of interest expense over the life of the bonds?arrow_forward
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- On January 2, Year 1, Kampai Sushi Bar sold $800,000 of bonds for $785,000. The bonds will mature in 10 years and pay interest annually on December 31. The company properly recorded the payment of interest and the amortization of the discount using the effective interest method. What will be the carrying value of the bonds at the end of Year 1? a.$800,000 b.less than $785,000 c.$785,000 d.greater than $785,000, but less than $800,000arrow_forwardNicholas Smith Fitness Gym has $700,000 of 20-year bonds payable outstanding. These bonds had a discount of $56,000 at issuance, which was 10 years ago. The company uses the straight-line amortization method. The current carrying amount of these bonds payable is $672,000. $644,000. $700,000. $728,000.arrow_forwardA company has $200,000 of 10-year bonds payable outstanding. These bonds had a discount of $24,000 at issuance, which was 5 years ago. If the company uses the straight line amortization method. The current carrying amount of these bonds payable will be?arrow_forward
- Wildhorse Company purchased bonds with a face amount of $1225000 between interest payment dates. Wildhorse purchased the bonds at 101, paid brokerage costs of $15900, and paid accrued interest for three months of $25900. The amount to record as the cost of this long-term investment in bonds is $1253150. $1237250. $1225000. $1279050.arrow_forwardHermosa Vista Company issued $180,000 5-year, 6.00% bonds and received $183,843 in cash. The market rate of interest when the bonds were issued was 5.50%. What is the amount of interest expense to be recorded for the first annual interest period if the company uses simplified effective-interest amortization? Multiple Choice $9,900.00 $10,111.37 $10,800.00 $11,030.58arrow_forwardSuperior drive ins Ltd borrowed money by issuing $5500,000 of 6% bonds payable at 93.5 on July 1,2018. The bonds are 10 year bonds and pay interest of each January 1 and July 1. 1. How much cash did superior receive when it issued the bonds payable? Journalize transaction Superior received $5,142,500 when the bonds payable were issued JOURNALIZE RHE ISSUANXE OF BONDS PAYABLE RECORD DEBIRS FIRST THEN CREDITS EXCLUDE EDPLANATKONS FOR ANY JOURNAL ENTRIESarrow_forward
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