Digital Telephony issued 10% bonds, dated January 1, with a face amount of $37 million on January 1, 2024. The bonds mature in 2034 (10 years). For bonds of similar risk and maturity the market yield is 12%. Interest is paid semiannually on June 30 and December 31. Digital recorded the issue as follows: Note: Use appropriate factor(s) from the tables provided. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) General Journal Cash Discount on bonds Bonds payable Debit 32,755,952 4,244,048 Credit 37,000,000 Digital also leased switching equipment to Midsouth Communications, Incorporated on September 30, 2024. Digital purchased the equipment from MDS Corporation at a cost of $11 million. The five-year lease agreement calls for Midsouth to make quarterly lease payments of $717,837, payable each September 30, December 31, March 31, and June 30, with the first payment on September 30, 2024. Digital's implicit interest rate is 12%. Required: 1. What would be the amount(s) related to the bonds that Digital would report in its statement of cash flows for the year ended December 31, 2024, under the direct method? 2. What would be the amounts related to the lease that Midsouth would report in its statement of cash flows for the year ended December 31, 2024, under the direct method? 3. What would be the amounts related to the lease that Digital would report in its statement of cash flows for the year ended December 31, 2024, under the direct method? 4. Assume MDS manufactured the equipment at a cost of $10 million and that Midsouth leased the equipment directly from MDS. What would be the amounts related to the lease that MDS would report in its statement of cash flows for the year ended December 31, 2024? Note: Do not round intermediate calculations. Enter your answers in whole dollars. List cash outflows as negative amounts. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Assume MDS manufactured the equipment at a cost of $10 million and that Midsouth leased the equipment directly from MDS. What would be the amounts related to the lease that MDS would report in its statement of cash flows for the year ended December 31, 2024? Activity Amount Operating activities Investing activities $ Financing activities $ < Required 3 Required 4 >

Digital Telephony issued 10% bonds, dated January 1, with a face amount of $37 million on January 1, 2024. The bonds mature in 2034 (10 years). For bonds of similar risk and maturity the market yield is 12%. Interest is paid semiannually on June 30 and December 31. Digital recorded the issue as follows: Note: Use appropriate factor(s) from the tables provided. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) General Journal Cash Discount on bonds Bonds payable Debit 32,755,952 4,244,048 Credit 37,000,000 Digital also leased switching equipment to Midsouth Communications, Incorporated on September 30, 2024. Digital purchased the equipment from MDS Corporation at a cost of $11 million. The five-year lease agreement calls for Midsouth to make quarterly lease payments of $717,837, payable each September 30, December 31, March 31, and June 30, with the first payment on September 30, 2024. Digital's implicit interest rate is 12%. Required: 1. What would be the amount(s) related to the bonds that Digital would report in its statement of cash flows for the year ended December 31, 2024, under the direct method? 2. What would be the amounts related to the lease that Midsouth would report in its statement of cash flows for the year ended December 31, 2024, under the direct method? 3. What would be the amounts related to the lease that Digital would report in its statement of cash flows for the year ended December 31, 2024, under the direct method? 4. Assume MDS manufactured the equipment at a cost of $10 million and that Midsouth leased the equipment directly from MDS. What would be the amounts related to the lease that MDS would report in its statement of cash flows for the year ended December 31, 2024? Note: Do not round intermediate calculations. Enter your answers in whole dollars. List cash outflows as negative amounts. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Assume MDS manufactured the equipment at a cost of $10 million and that Midsouth leased the equipment directly from MDS. What would be the amounts related to the lease that MDS would report in its statement of cash flows for the year ended December 31, 2024? Activity Amount Operating activities Investing activities $ Financing activities $ < Required 3 Required 4 >

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

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