On January 1, 2025, Flounder Corporation sold a building that cost $274,530 and that had accumulated depreciation of$105,600 on the date of sale. Flounder received as consideration a $264,530 non-interest-bearing note due on January 1, 2028.There was no established exchange price for the building, and the note had no ready market. The prevailing rate of interest for anote of this type on January 1, 2025, was 9%. At what amount should the gain from the sale of the building be reported? (Roundfactor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)The amount of gain should be reported(b)Your answer is incorrect.$Flounder must pay for the bonds35335On January 1, 2025, Flounder Corporation purchased 349 of the $1,000 face value, 9%, 10-year bonds of Walters Inc. The bondsmature on January 1, 2035, and pay interest annually beginning January 1, 2026. Flounder purchased the bonds to yield 11%.How much did Flounder pay for the bonds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places,es 458,581.)

Notes:- Subpart (a) is correct. Therefore I'm solving only subpart (b). Bonds :— It is one of…

(b) Your answer is incorrect. On January 1, 2025, Flounder Corporation purchased 349 of the $1,000 face value, 9%, 10-year bonds of Walters Inc. The bonds mature on January 1, 2035, and pay interest annually beginning January 1, 2026. Flounder purchased the bonds to yield 11%. How much did Flounder pay for the bonds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, es 458,581) Flounder must pay for the bonds

(b) Your answer is incorrect. On January 1, 2025, Flounder Corporation purchased 349 of the $1,000 face value, 9%, 10-year bonds of Walters Inc. The bonds mature on January 1, 2035, and pay interest annually beginning January 1, 2026. Flounder purchased the bonds to yield 11%. How much did Flounder pay for the bonds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, es 458,581) Flounder must pay for the bonds

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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(b) Gassy Stores sells $400,000 of 12% bonds on June 1, 2022. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2026. The market rate of similar investments is 10%. On December 1, 2024, Gassy Stores retired the bond for $400,000. The company closes its books on December 31. Requirements: (Show all workings) I. Calculate the proceeds from the sale of the bond. Clearly show the amount of the premium or discount and state two reasons which support the premium or discount calculated. II. Prepare a bond amortization schedule for the bond’s life III. Prepare all the journal entries for 2022, 2023 & 2024
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