Analyzing and Reporting Financial Statement Effects of Bond Transactions On January 1 of the current year, Banek Inc. issued $700,000 of 8%, nine-year bonds for $618,173, which implies a market (yield) rate of 10%. Semiannual interest is payable on June 30 and December 31 of each year. a. Show Excel inputs to confirm the bond issue price. Note: Round your answer to two decimal places. rate= nper= pmt= FV= 0.05 18 (28,000) (700,000) ▼ Answer = $ 125,901.16 * b. Indicate the financial statement effects using the template for (1) bond issuance, (2) semiannual interest payment and discount amortization on June 30 of the current year, and (3) semiannual interest payment and discount amortization on December 31 of the current year. Note: For each account category, indicate the appropriate account name. Enter "N/A" for any account category that is not used for a given transaction. Note: Indicate a decrease in an account category by including a negative sign with the amount. Note: Round your answers to the nearest whole dollar. Transaction Cash Asset Noncash Assets Balance Sheet Liabilities Income St Contrib. Capital Earned Capital Revenues 1. 0 x 0 x 0 0✓ 0✓ Cash ✔ N/A Long term debt N/A N/A ÷ /A N/A 2. 0 x 0 0 x 0 ✓ 0 * 0✓ Cash ÷ ✔ N/A Long term debt ✰ ✔ N/A Retained earnings M/A Interest 3. 0 x 0 ✔ = 0 x 0 ✓ 0 x 0✓ Cash ✓ N/A Long term debt ÷ ✓ N/A ÷ Retained earnings M/A ÷ Interest
Analyzing and Reporting Financial Statement Effects of Bond Transactions On January 1 of the current year, Banek Inc. issued $700,000 of 8%, nine-year bonds for $618,173, which implies a market (yield) rate of 10%. Semiannual interest is payable on June 30 and December 31 of each year. a. Show Excel inputs to confirm the bond issue price. Note: Round your answer to two decimal places. rate= nper= pmt= FV= 0.05 18 (28,000) (700,000) ▼ Answer = $ 125,901.16 * b. Indicate the financial statement effects using the template for (1) bond issuance, (2) semiannual interest payment and discount amortization on June 30 of the current year, and (3) semiannual interest payment and discount amortization on December 31 of the current year. Note: For each account category, indicate the appropriate account name. Enter "N/A" for any account category that is not used for a given transaction. Note: Indicate a decrease in an account category by including a negative sign with the amount. Note: Round your answers to the nearest whole dollar. Transaction Cash Asset Noncash Assets Balance Sheet Liabilities Income St Contrib. Capital Earned Capital Revenues 1. 0 x 0 x 0 0✓ 0✓ Cash ✔ N/A Long term debt N/A N/A ÷ /A N/A 2. 0 x 0 0 x 0 ✓ 0 * 0✓ Cash ÷ ✔ N/A Long term debt ✰ ✔ N/A Retained earnings M/A Interest 3. 0 x 0 ✔ = 0 x 0 ✓ 0 x 0✓ Cash ✓ N/A Long term debt ÷ ✓ N/A ÷ Retained earnings M/A ÷ Interest
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Transcribed Image Text:Analyzing and Reporting Financial Statement Effects of Bond Transactions
On January 1 of the current year, Banek Inc. issued $700,000 of 8%, nine-year bonds for $618,173, which implies a market (yield) rate of 10%. Semiannual interest is payable on June 30 and December 31 of each
year.
a. Show Excel inputs to confirm the bond issue price.
Note: Round your answer to two decimal places.
rate=
nper=
pmt=
FV=
0.05
18
(28,000)
(700,000) ▼
Answer = $ 125,901.16 *
b. Indicate the financial statement effects using the template for (1) bond issuance, (2) semiannual interest payment and discount amortization on June 30 of the current year, and (3) semiannual interest payment
and discount amortization on December 31 of the current year.
Note: For each account category, indicate the appropriate account name. Enter "N/A" for any account category that is not used for a given transaction.
Note: Indicate a decrease in an account category by including a negative sign with the amount.
Note: Round your answers to the nearest whole dollar.
Transaction
Cash Asset
Noncash Assets
Balance Sheet
Liabilities
Income St
Contrib. Capital
Earned Capital
Revenues
1.
0 x
0 x
0
0✓
0✓
Cash
✔ N/A
Long term debt
N/A
N/A
÷
/A
N/A
2.
0 x
0
0 x
0 ✓
0 *
0✓
Cash
÷ ✔ N/A
Long term debt
✰ ✔ N/A
Retained earnings
M/A
Interest
3.
0 x
0 ✔ =
0 x
0 ✓
0 x
0✓
Cash
✓ N/A
Long term debt
÷ ✓ N/A
÷
Retained earnings
M/A
÷
Interest
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