2. McCool Corporation wholesales repair products to equipment manufacturers. On April 1, 2010 McCool Corporation issued $30000,000 of five year 10% bonds at a market (effective) interest rate of 8%, receiving cash of $32,466,500. Interest is payable semiannually on April 1 and October 1. Journalize the entries to record the following (Amortize premium by straight line method) ea Sale of bonds on April 1, 2012 First interest payment on Oct. 1, 2012, and amortization of bond premium for six months (round to the nearest dollar) Explain briefly why the company was able to issue bonds for $32,446,500 rather than for the face amount of $30,000,000 a. b. C. 3. On January 10, 2012 Badger Co. purchased 30% of the outstanding stock of Crest Co. for $123,000. Crest paid total dividends to all shareholders of $15,000 on July 15. crest had a net loss of $25,000 for 2012 a. Journalize Badger's purchase of the stock, receipt of dividend and adjusting entry for the equity loss in Crest Co. Stock. b. Compute the balance of investment in Crest CO. Stock for December 31, 2012.
2. McCool Corporation wholesales repair products to equipment manufacturers. On April 1, 2010 McCool Corporation issued $30000,000 of five year 10% bonds at a market (effective) interest rate of 8%, receiving cash of $32,466,500. Interest is payable semiannually on April 1 and October 1. Journalize the entries to record the following (Amortize premium by straight line method) ea Sale of bonds on April 1, 2012 First interest payment on Oct. 1, 2012, and amortization of bond premium for six months (round to the nearest dollar) Explain briefly why the company was able to issue bonds for $32,446,500 rather than for the face amount of $30,000,000 a. b. C. 3. On January 10, 2012 Badger Co. purchased 30% of the outstanding stock of Crest Co. for $123,000. Crest paid total dividends to all shareholders of $15,000 on July 15. crest had a net loss of $25,000 for 2012 a. Journalize Badger's purchase of the stock, receipt of dividend and adjusting entry for the equity loss in Crest Co. Stock. b. Compute the balance of investment in Crest CO. Stock for December 31, 2012.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:2. McCool Corporation wholesales repair products to equipment manufacturers. On
April 1, 2010 McCool Corporation issued $30000,000 of five year 10% bonds at a market
(effective) interest rate of 8%, receiving cash of $32,466,500. Interest is payable
semiannually on April 1 and October 1. Journalize the entries to record the following
(Amortize premium by straight line method)
ea
Sale of bonds on April 1, 2012
First interest payment on Oct. 1, 2012, and amortization of bond premium for
six months (round to the nearest dollar)
Explain briefly why the company was able to issue bonds for $32,446,500
rather than for the face amount of $30,000,000
a.
b.
C.
3. On January 10, 2012 Badger Co. purchased 30% of the outstanding stock of Crest Co.
for $123,000. Crest paid total dividends to all shareholders of $15,000 on July 15. crest
had a net loss of $25,000 for 2012
a. Journalize Badger's purchase of the stock, receipt of dividend and adjusting entry
for the equity loss in Crest Co. Stock.
b. Compute the balance of investment in Crest CO. Stock for December 31, 2012.
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