1)Roberts Corp. reports pretax accounting income of $200,000, but due to a single temporary difference, taxable income is only $150,000. At the beginning of the year, no temporary differences existed. Roberts is subject to a tax rate of 40%. Required: Prepare the compound journal entry to record Roberts Corp.'s income taxes. Show well-labeled computations. Income tax xp(to balance) Deferred tax liability (200k-150k*.4) Income tax payable(150k*.4) 40,000 20,000 60,000 2)On January 1, 2013, Boomer Universal issued 12% bonds dated January 1, 2013, with a face amount of $200 million. The bonds mature in 2022 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2013. 2. Prepare the journal entry to record the bond issuance by Boomer on January 1, 2013. 3. Prepare the journal entry to record interest on June 30, 2013, using the straight-line method. 4. Prepare the journal entry to record interest on December 31, 2013, using the straight-line method.
1)Roberts Corp. reports pretax accounting income of $200,000, but due to a single temporary difference, taxable income is only $150,000. At the beginning of the year, no temporary differences existed. Roberts is subject to a tax rate of 40%. Required: Prepare the compound journal entry to record Roberts Corp.'s income taxes. Show well-labeled computations. Income tax xp(to balance) Deferred tax liability (200k-150k*.4) Income tax payable(150k*.4) 40,000 20,000 60,000 2)On January 1, 2013, Boomer Universal issued 12% bonds dated January 1, 2013, with a face amount of $200 million. The bonds mature in 2022 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2013. 2. Prepare the journal entry to record the bond issuance by Boomer on January 1, 2013. 3. Prepare the journal entry to record interest on June 30, 2013, using the straight-line method. 4. Prepare the journal entry to record interest on December 31, 2013, using the straight-line method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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D4.
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Transcribed Image Text:1)Roberts Corp. reports pretax accounting income of $200,000, but due to a single temporary difference, taxable
income is only $150,000. At the beginning of the year, no temporary differences existed. Roberts is subject to a
tax rate of 40%.
Required:
Prepare the compound journal entry to record Roberts Corp's income taxes. Show well-labeled computations.
Income tax xp(to balance)
Deferred tax liability (200k-150k*.4)
Income tax payable(150k*.4)
40,000
20,000
60,000
2)On January 1, 2013, Boomer Universal issued 12% bonds dated January 1, 2013, with a face amount of $200
million. The bonds mature in 2022 (10 years). For bonds of similar risk and maturity, the market yield is 10%.
Interest is paid semiannually on June 30 and December 31.
Required:
1. Determine the price of the bonds at January 1, 2013.
2. Prepare the journal entry to record the bond issuance by Boomer on January 1, 2013.
3. Prepare the journal entry to record interest on June 30, 2013, using the straight-line method.
4. Prepare the journal entry to record interest on December 31, 2013, using the straight-line method.
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