Accounting
27th Edition
ISBN: 9781337272094
Author: WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher: Cengage Learning,
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Question
Chapter 14, Problem 4DQ
(a)
To determine
Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.
Contract interest rate: It refers to the interest rate that is stated on the face of the bonds.
Market interest rate: It refers to the interest rate that the lenders expect, or demands from the borrower to part with their money as loan to them.
To identify: The amount of cash received from sales of the bond
(b)
(1)
To determine
To Identify: The amounts of face value.
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4. A corporation issues $26,000,000 of 9% bonds to
yield interest at the rate of 7%. (a) Was the amount
of cash received from the sale of the bonds greater
or less than $26,000,000? (b) Identify the following
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amount, (2) market or effective rate of interest,
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sold at a
A corporation issues $40,000,000 of 6% bonds to yield an effective interest rate of 8%.
Was the amount of cash received from the sale of the bonds more or less than $40,000,000?
Identify the following amounts related to the bond issue: (1) face amount, (2) market rate of interest, (3) contract rate of interest, and (4) maturity amount.
A $2,600 credit balance in the Premium on Bonds Payable account represents which of the following?
Select one:
a. An overpayment for a bond purchase
b. An underpayment for a bond purchase
c. The current amount of amortization expense
d. The unamortized amount of premium earned on a bond issue
Chapter 14 Solutions
Accounting
Ch. 14 - Describe the two distinct obligations incurred by...Ch. 14 - Explain the meaning of each of the following terms...Ch. 14 - If you asked your broker to buy you a 12% bond...Ch. 14 - Prob. 4DQCh. 14 - If bonds issued by a corporation are sold at...Ch. 14 - The following data relate to a 2,000,000, 8% bond...Ch. 14 - Bonds Payable has a balance of 5,000,000, and...Ch. 14 - What is a mortgage note?Ch. 14 - Fleeson Company needs additional funds to purchase...Ch. 14 - In what section of the balance sheet would a bond...
Ch. 14 - Alternative financing plans Frey co. is...Ch. 14 - Alternative financing plans Brower co. is...Ch. 14 - Issuing bonds at face amount On January 1, the...Ch. 14 - Issuing bonds at face amount On January 1, the...Ch. 14 - Prob. 14.3APECh. 14 - Issuing bonds at a discount On the first day of...Ch. 14 - Prob. 14.4APECh. 14 - Prob. 14.4BPECh. 14 - Prob. 14.5APECh. 14 - Prob. 14.5BPECh. 14 - Prob. 14.6APECh. 14 - Prob. 14.6BPECh. 14 - A Redemption of bonds payable A 1,500,000 bond...Ch. 14 - Redemption of bonds payable A 1,200,000 bond issue...Ch. 14 - Journalizing installment notes On the first day of...Ch. 14 - Journalizing installment notes On the first day of...Ch. 14 - Times interest earned Berry Company reported the...Ch. 14 - Times interest earned Aver ill Products Inc....Ch. 14 - Prob. 14.1EXCh. 14 - Prob. 14.2EXCh. 14 - Prob. 14.3EXCh. 14 - Bond price Stone Energy Corporation's 7.5% bonds...Ch. 14 - Entries for issuing bonds Thomson Co. products and...Ch. 14 - Prob. 14.6EXCh. 14 - Prob. 14.7EXCh. 14 - Prob. 14.8EXCh. 14 - Entries for issuing and calling bonds; gain Emil...Ch. 14 - Entries for installment note transactions On the...Ch. 14 - Entries for installment note transactions On...Ch. 14 - Entries for installment note transactions On...Ch. 14 - Reporting bonds At the beginning of the current...Ch. 14 - Times interest earned The following data were...Ch. 14 - Times interest earned Loomis, Inc. reported the...Ch. 14 - Times interest earned lacouva Company reported the...Ch. 14 - Present value of amounts due Tommy John is going...Ch. 14 - Prob. 14.18EXCh. 14 - Present value of an annuity On January 1, you win...Ch. 14 - Prob. 14.20EXCh. 14 - Prob. 14.21EXCh. 14 - Present value of bonds payable; premium Moss Co....Ch. 14 - Prob. 14.23EXCh. 14 - Amortize premium by interest method Shunda...Ch. 14 - Prob. 14.25EXCh. 14 - Prob. 14.26EXCh. 14 - Prob. 14.1APRCh. 14 - Bond discount, entries for bonds payable...Ch. 14 - Prob. 14.3APRCh. 14 - Entries for bonds payable and installment note...Ch. 14 - Bond discount, entries for bonds payable...Ch. 14 - Prob. 14.6APRCh. 14 - Effect of financing on earnings per share Three...Ch. 14 - Bond discount, entries for bonds payable...Ch. 14 - Bond premium, entries for bonds payable...Ch. 14 - Entries for bonds payable and installment note...Ch. 14 - Bond discount entries for bonds payable...Ch. 14 - Bond premium, entries for bonds payable...Ch. 14 - Prob. 14.1CPCh. 14 - Prob. 14.3CPCh. 14 - Prob. 14.4CPCh. 14 - Prob. 14.5CPCh. 14 - Prob. 14.6CPCh. 14 - Times interest earned The following financial data...
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- If the Bonds Payable account has a balance of $700,000 and the Discount on Bonds Payable account has a balance of $36,000, what is the carrying value of the bonds? Carrying value of the bonds $arrow_forwardBonds Payable has a balance of $900,000 and Premium on Bonds Payable has a balance of $10,000. If the issuing corporation redeems the bonds at 103, what is the amount of gain or loss on redemption?arrow_forward1. A bond indenture is a. the amount due at the maturity date of the bonds b. the amount for which the corporation can buy back the bonds prior to the maturity date c. a contract between the corporation issuing the bonds and the underwriters selling the bonds d. a contract between the corporation issuing the bonds and the bondholders 2. The income statement disclosed the following items for the current year: Depreciation expense $36,000 Gain on disposal of equipment 21,000 Net income 317,500 Balances of the current assets and current liabilities accounts changed between December 31, last year, and December 31, this year, as follows: Increase in accounts receivable $5,600 Decrease in inventory 3,200 Decrease in prepaid insurance 1,200 Decrease in account payable 3,800 Increase in income taxes payable 1,200 Increase in dividends payable 850 Required: Prepare the Cash Flows from Operating Activities section of the…arrow_forward
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