Presented below are three independent situations. Instructions a. On January 1, 2019, Langley Co. issued 9% bonds with a face value of $700,000 for $656,992 to yield 10%. The bonds are dated January 1, 2019, and pay interest annually. What amount is reported for interest expense in 2019 related to these bonds? b. Tweedie Building Co. has a number of long-term bonds outstanding at December 31, 2019. These long-term bonds have the following sinking fund requirements and maturities for the next 6 years. Sinking Fund Maturities 2020 $300,000 $100,000 2021 100,000 250,000 2022 100,000 100,000 2023 200,000 — 2024 200,000 150,000 2025 200,000 100,000 Indicate how this information should be reported in the financial statements at December 31, 2019. c. In the long-term debt structure of Beckford Inc., the following three bonds were reported: mortgage bonds payable $10,000,000; collateral trust bonds $5,000,000; bonds maturing in installments, secured by plant equipment $4,000,000. Determine the total amount, if any, of debenture bonds outstanding.
Presented below are three independent situations.
Instructions
a. On January 1, 2019, Langley Co. issued 9% bonds with a face value of $700,000 for $656,992 to yield 10%. The bonds are dated January 1, 2019, and pay interest annually. What amount is reported for interest expense in 2019 related to these bonds?
b. Tweedie Building Co. has a number of long-term bonds outstanding at December 31, 2019. These long-term bonds have the following sinking fund requirements and maturities for the next 6 years.
|
Sinking Fund |
Maturities |
|
|
2020 |
$300,000 |
$100,000 |
|
2021 |
100,000 |
250,000 |
|
2022 |
100,000 |
100,000 |
|
2023 |
200,000 |
— |
|
2024 |
200,000 |
150,000 |
|
2025 |
200,000 |
100,000 |
Indicate how this information should be reported in the financial statements at December 31, 2019.
c. In the long-term debt structure of Beckford Inc., the following three bonds were reported: mortgage bonds payable $10,000,000; collateral trust bonds $5,000,000; bonds maturing in installments, secured by plant equipment $4,000,000. Determine the total amount, if any, of debenture bonds outstanding.
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