Haven Corporation issued $700,000 of 10-year bonds payable at par in Year 1. During Year 5, Haven paid $50,000 interest and an additional $233,333 to retire one-third of the bonds at par. These activities would be reported in Haven's statement of cash flows for Year 5 as: Select one: a. $466,667 net cash provided by financing activities, and $50,000 cash disbursed for operating activities. b. $283,333 net cash provided by financing activities. c. $283,333 net cash used in financing activities. d. $233,333 net cash used in financing activities, and $50,000 cash disbursed for operating activities.

Haven Corporation issued $700,000 of 10-year bonds payable at par in Year 1. During Year 5, Haven paid $50,000 interest and an additional $233,333 to retire one-third of the bonds at par. These activities would be reported in Haven's statement of cash flows for Year 5 as: Select one: a. $466,667 net cash provided by financing activities, and $50,000 cash disbursed for operating activities. b. $283,333 net cash provided by financing activities. c. $283,333 net cash used in financing activities. d. $233,333 net cash used in financing activities, and $50,000 cash disbursed for operating activities.

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 6PA: Saverin, Inc. produces and sells outdoor equipment. On July 1, 2016, Saverin, Inc. issued 62,500,000...

See similar textbooks

Similar questions

Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the market of interest was 9%. The company uses the effective-interest method of amortization. At the end of the year, the company will record ________. A. a credit to cash for $28,733 B. a debit to interest expense for $31,267 C. a debit to Discount on Bonds Payable for $1,267 D. a debit to Premium on Bonds Payable for $1.267
Saverin, Inc. produces and sells outdoor equipment. On July 1, 2016, Saverin, Inc. issued 62,500,000 of 10-year, 9% bonds at a market (effective) interest rate of 8%, receiving cash of 66,747,178. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Instructions 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 2016, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.) b. The interest payment on June 30, 2017, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.) 3. Determine the total interest expense for 2016.
On January 1, Jim Shorts Corporation issued bonds for $580 million. This bond issue was originally issued at premium. During the same year, $1,500,000 of the bond premium was amortized. On a statement of cash flows prepared using the indirect method, Jim Shorts Corporation should report: O that $1.5 million to be added to net income O An investing activity of $580 million. O A financing activity of $300 million. O that $1.5 million to be deducted from net income
On January 1, Year 1, Jones Company issued bonds with a $250,000 face value, a stated rate of interest of 8.5%, and a 5-year term to maturity. The bonds were issued at 98. Interest is payable in cash on December 31st of each year. The company amortizes bond discounts and premiums using the straight-line method. What is the amount of cash outflow from operating activities shown on Jones' statement of cash flows for the year ending December 31, Year 2? Multiple Choice $21,250 $22,250 $20.250 $23,250
On January 1, Year 1, Victor Company issued bonds with a $269,000 face value, a stated rate of interest of 5%, and a 5-year term to maturity. The bonds sold at 96. Interest is payable in cash on December 31 of each year. Victor uses the straight-line method to amortize bond discounts and premiums. What is the amount of cash flow from operating activities on the statement of cash flows for the year ending December 31, Year 3? Multiple Choice $15,602 $13,450 $12,700 $10,760
The following are four independent situations. a. On March 1, 2021, Wilke Co. issued at 103 plus accrued interest $4,000,000, 9% bonds. The bonds are dated January 1, 2021, and pay interest semiannually on July 1 and January 1. In addition, Wilke Co. incurred $27,000 of bond issuance costs. Compute the net amount of cash received by Wilke Co. as a result of the issuance of these bonds. b. On January 1, 2020, Langley Co. issued 9% bonds with a face value of $700,000 for $656,992 to yield 10%. The bonds are dated January 1, 2020, and pay interest annually. What amount is reported for interest expense in 2020 related to these bonds, assuming that Langley used the effective-interest method for amortizing bond premium and discount? c. Tweedie Building Co. has a number of long-term bonds outstanding at December 31, 2020. These long-term bonds have the following sinking fund requirements and maturities for the next 6 years. 0000 Sinking Fund )Maturities) 2021 $300,0000…
The total interest expense over the 5-year life of the bonds is $100,000. How will the issuance of these bonds on January 1, Year 1 be reported on OSU’s Cash Flow Statement? Is it inflow or outflow
In the past year, Blossom Corporation reported assets of $230229000. Liabilities reported on the balance sheet on the same date were reported at $69091655. Blossom issued a new note payable for cash during the year. The 8%, 5-year note was issued at a face value of $5008000. What is the company's debt to asset ratio after the refinance? O 29.37% 31.50% 32.18% O 30.01%
Consider the following independent situations: a. On March 1, 2020, Heide Co. issued at 103 plus accrued interest $3,000,000, 9% bonds. The bonds are dated January 1, 2020, and pay interest semiannually on July 1 and January 1. In addition, Heide Co. incurred $27,000 of bond issuance costs. Compute the net amount of cash received by Heide Co. as a result of the issuance of these bonds. b. On January 1, 2020, Reymont Co. issued 9% bonds with a face value of $500,000 for $469,280 to yield 10%. The bonds are dated January 1, 2020, and pay interest annually. What amount is reported as bond discount on the issue date? Prepare the journal entry to record interest expense on December 31, 2020. c. Czeslaw Building Co. has a number of long-term bonds outstanding at December 31, 2020. These long-term bonds have the following sinking fund requirements and maturities for the next 6 years. Sinking Fund Maturities 2021 $300,000 $100,000 2022 100,000 250,000 2023…
please help me
On July 1, 20Y1, Danzer Industries Inc. issued $60,000,000 of 10-year, 8% bonds at a market (effective) interest rate of 10%, receiving cash of $52,522,704. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. 3. Determine the total interest expense for 20Y1. 4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest? 5. Compute the price of $52,522,704 received for the bonds by using the present…
To get cash to purchase operating assets, Ballard Company, with a December 31 fiscal year-end, issued bonds with the following characteristics: (i) (ii) (iii) (iv) C. Date of bonds: January 1, 2011 Maturity amount and date: $100,000 due in 10 years (December 31, 2020). Interest: 11% per year payable each December 31. Date issued: January 1, 2011. Required: a. Construct the amortization table for the first 2 years for each bond. See (b). b. Give the journal entries to record the issuance and the first 2 interest payments under each of 3 different independent cases: Case A - The bonds sold at par. Case B - The bonds sold to yield 12%. Case C - The bonds sold to yield 10% Provide the following amounts to be reported on the 2011 financial statements: a., Interest expense b., Bonds payable c., Unamortized premium or discount d., Net Liability e., Stated rate of interest (coupon rate) f., Cash paid for interest Case A $ Case B $ Case C $