Sikes Corporation, whose annual accounting period ends on December 31, issued the following bonds: Date of bonds: January 1, 2018 Maturity amount and date: $150,000 due in 10 years (December 31, 2027) Interest: 10 percent per year payable each December 31 Date issued: January 1, 2018 Required: For each of the three independent cases that follow, provide the amounts to be reported on the January 1, 2018, financial statements immediately after the bonds are issued. TIP: See Exhibit 10.5 for an illustration distinguishing Bonds Payable from their carrying value. (Deductions should be indicated by a minus sign.)
Sikes Corporation, whose annual accounting period ends on December 31, issued the following bonds: Date of bonds: January 1, 2018 Maturity amount and date: $150,000 due in 10 years (December 31, 2027) Interest: 10 percent per year payable each December 31 Date issued: January 1, 2018 Required: For each of the three independent cases that follow, provide the amounts to be reported on the January 1, 2018, financial statements immediately after the bonds are issued. TIP: See Exhibit 10.5 for an illustration distinguishing Bonds Payable from their carrying value. (Deductions should be indicated by a minus sign.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Sikes Corporation, whose annual accounting period ends on December 31, issued the following bonds:
| Date of bonds: January 1, 2018 |
| Maturity amount and date: $150,000 due in 10 years (December 31, 2027) |
| Interest: 10 percent per year payable each December 31 |
| Date issued: January 1, 2018 |
Required:
- For each of the three independent cases that follow, provide the amounts to be reported on the January 1, 2018, financial statements immediately after the bonds are issued. TIP: See Exhibit 10.5 for an illustration distinguishing Bonds Payable from their carrying value. (Deductions should be indicated by a minus sign.)
Transcribed Image Text:Case A
Case B
Case C
January 1, 2018–Financial statements:
(At 100)
(At 96)
(At 102)
a. Bonds payable
b. Unamortized premium (or discount)
c. Carrying value
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