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Posted by: Homeworkhelp
Price Quoted by Student: $6
Posted On: 2011-03-11 04:04:38
 
Question

14-2B ParFour issues $1,700,000 of 10%, 10-year bonds dated January 1, 2004, that pay interest

 

Problem 14-2B Straight-line amortization of both bond discount and bond premium

 

ANSWER KEY Problem 14-2B ParFour issues $1,700,000 of 10%, 10-year bonds dated January 1, 2004,

 

Fundamental Accounting Principles, 17th Edition Larson Wild Chiappetta:

 

Problem 14-2B ParFour issues $1,700,000 of 10%, 10-year bonds dated January 1, 2004, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,505,001.

 

Required

1. Prepare the January 1, 2004, journal entry to record the bonds’ issuance.

2. For each semiannual period, compute (a) the cash payment, (b) the straight-line discount amortization, and (c) the bond interest expense.

3. Determine the total bond interest expense to be recognized over the bonds’ life.

4. Prepare the first two years of an amortization table like Exhibit 14.7 using the straight-line method.

5. Prepare the journal entries to record the first two interest payments.

6. Assume that the bonds are issued at a price of $2,096,466. Repeat parts 1 through 5.

Check (3) $1,894,999 (4) 6/30/2005 carrying value, $1,534,251

Solutions
ANSWER KEY Problem 14-2B ParFour issues $1,700,000
Price $6
Attachment 1: P14-2B ParFour issues.doc
Solution Posted By: Homeworkhelp    Posted on: 11-03-2011