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Jonny Cakes issued callable bonds with a par value of $100,000. The call option requires the company to pay a call premium of $3,000 to bondholders plus the par value. After the June 30th interest payment, the bonds have a carrying value of $104,500. A  $500,000 bond issue on which there is an unamortized discount of $40,000 is redeemed for $475,000. Installment Note: use the attached Present Value of an Annuity of $1 at compound interest chart to complete the following transactions On the first day of the fiscal year 2010, a company issues a $30,000, 10%, five yearinstallment note. Journalize issuing the note Determine the annual payment Amortize the installment note Journalize the annual interest expense for the life of the note

Jonny Cakes issued callable bonds with a par value of $100,000. The call option requires the company to pay a call premium of $3,000 to bondholders plus the par value. After the June 30th interest payment, the bonds have a carrying value of $104,500. A  $500,000 bond issue on which there is an unamortized discount of $40,000 is redeemed for $475,000. Installment Note: use the attached Present Value of an Annuity of $1 at compound interest chart to complete the following transactions On the first day of the fiscal year 2010, a company issues a $30,000, 10%, five yearinstallment note. Journalize issuing the note Determine the annual payment Amortize the installment note Journalize the annual interest expense for the life of the note

FINANCIAL ACCOUNTING
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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  1. Jonny Cakes issued callable bonds with a par value of $100,000. The call option requires the company to pay a call premium of $3,000 to bondholders plus the par value. After the June 30th interest payment, the bonds have a carrying value of $104,500.
  2. A  $500,000 bond issue on which there is an unamortized discount of $40,000 is redeemed for $475,000.
  3. Installment Note: use the attached Present Value of an Annuity of $1 at compound interest chart to complete the following transactions

  4. On the first day of the fiscal year 2010, a company issues a $30,000, 10%, five yearinstallment note.

    1. Journalize issuing the note
    2. Determine the annual payment
    3. Amortize the installment note
    4. Journalize the annual interest expense for the life of the note
ЕXHIBIT 10 Present Value of an Annuity of $1 at Compound Interest Periods 4% 42% 5% 52% 6% 6½% 7% 10% 11% 12% 13% 1 0.96154 0.95694 0.95238 0.94787 0.94340 0.93897 0.93458 0.90909 0.90090 0.89286 0.88496 1.88609 1.87267 1.85941 1.84632 1.83339 1.82063 1.80802 1.73554 1.71252 1.69005 1.66810 3 2.77509 2.74896 2.72325 2.69793 2.67301 2.64848 2.62432 2.48685 2.44371 2.40183 2.36115 4 3.62990 3.58753 3.54595 3.50515 3.46511 3.42580 3.38721 3.16987 3.10245 3.03735 2.97447 4.45182 4.38998 4.32948 4.27028 4.21236 4.15568 4.10020 3.79079 3.69590 3.60478 3.51723 5.24214 5.15787 5.07569 4.99553 4.91732 4.84101 4.76654 4.35526 4.23054 4.11141 3.99755 6.00205 5.89270 5.78637 5.68297 5.58238 5.48452 5.38929 4.86842 4.71220 4.56376 4.42261 8 6.73274 6.59589 6.46321 6.33457 6.20979 6.08875 5.97130 5.33493 5.14612 4.96764 4.79677 9 7.43533 7.26879 7.10782 6.95220 6.80169 6.65610 6.51523 5.75902 5.53705 5.32825 5.13166 10 8.11090 7.91272 7.72173 7.53763 7.36009 7.18883 7.02358 6.14457 5.88923 5.65022 5.42624
Transcribed Image Text:ЕXHIBIT 10 Present Value of an Annuity of $1 at Compound Interest Periods 4% 42% 5% 52% 6% 6½% 7% 10% 11% 12% 13% 1 0.96154 0.95694 0.95238 0.94787 0.94340 0.93897 0.93458 0.90909 0.90090 0.89286 0.88496 1.88609 1.87267 1.85941 1.84632 1.83339 1.82063 1.80802 1.73554 1.71252 1.69005 1.66810 3 2.77509 2.74896 2.72325 2.69793 2.67301 2.64848 2.62432 2.48685 2.44371 2.40183 2.36115 4 3.62990 3.58753 3.54595 3.50515 3.46511 3.42580 3.38721 3.16987 3.10245 3.03735 2.97447 4.45182 4.38998 4.32948 4.27028 4.21236 4.15568 4.10020 3.79079 3.69590 3.60478 3.51723 5.24214 5.15787 5.07569 4.99553 4.91732 4.84101 4.76654 4.35526 4.23054 4.11141 3.99755 6.00205 5.89270 5.78637 5.68297 5.58238 5.48452 5.38929 4.86842 4.71220 4.56376 4.42261 8 6.73274 6.59589 6.46321 6.33457 6.20979 6.08875 5.97130 5.33493 5.14612 4.96764 4.79677 9 7.43533 7.26879 7.10782 6.95220 6.80169 6.65610 6.51523 5.75902 5.53705 5.32825 5.13166 10 8.11090 7.91272 7.72173 7.53763 7.36009 7.18883 7.02358 6.14457 5.88923 5.65022 5.42624
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