blosiT/FstatementAnnuity serial bond issue is the total principal of an issue is repayable in a1.specified number of equal annual installments over the life of the issue.If the actual liability for goods or services ordered in the current year differs from the2. estimated liability, the Encumbrances account should be credited in the amount of theactual liability.If property taxes are not collected by the date specified by law, additionalrevenue is generally eamed by the fund of the government for which the taxeswere levied.3.General capital assets acquired under capital leases should not be recorded in the4.governmental activities' accounts.When purchase orders or contracts are issued for legally authorized purposes a record5.must be kept, but no entries in the General Fund or special revenue fund accounts arenecessary.Construction contracts for govemmental projects often provide that a stipulated6,percentage of each billing by the contractor will be retained by the govemment untilthe project is inspected and accepted upon completion.7. Water rights purchased by à city would be considered a capital asset.Budget reflects revenue and expense while balance sheet reflects assets and8.liabilities.Under current GASB standards the revenue from property taxes should be recorded in9.the period and in the amounts in which taxes are collected.10. Budget appropriations are sometimes called estimated expenditures.

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statement T/F Annuity serial bond issue is the total principal of an issue is repayable in a 1. specified number of equal annual installments over the life of the issue. nodr or services ordered in the current year differs from the the amount of the

statement T/F Annuity serial bond issue is the total principal of an issue is repayable in a 1. specified number of equal annual installments over the life of the issue. nodr or services ordered in the current year differs from the the amount of the

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Subject : Accounting
A lender offers a 1-year loan at what he calls 8 percent interest but requires the interest to be paid at the beginning rather than at the end of the year , as the usual practlce is to what interest ratc computed in the conventional manner does this interest charge correspond?
Discount Amortization On the finst day of the fiscal year, a company issues a $6,300,000, 6%, 5-year bond that pays semiannual interest of $189,000 (56,300,000 x 6% x W), receiving cash of $6,038,029. Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar, If an amount box does not require an entry, leave it blank,
The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. a. Bonds Payable b. The interest payment on June 30, Year 2, and the amortization of the bond premium, using the straight-line method. Round to the nearest dollar. 3. Determine the total interest expense for Year 1. Round to the nearest dollar. 4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? 5. Compute the price of $65,332,160 received for the bonds by using Present value at compound interest, and Present value of an annuity. Round to the nearest dollar. Your total may vary slightly from the price given due to rounding differences. Present value of the face amount Present value of the semiannual interest payments
What account would be debited (1), what account would be credit (2), and what amount would be paid to record the journal entry for each interest payment based on a $200,000 five-year, 10% bond and the bond was issued at $192,462 (11%) and interest is paid semiannually? JOURNAL Page 25 DATE DESCRIPTION P.REF. DEBIT CREDIT (1) ? (2) ? (1) Interest Expense debit $11,000, and (2) Cash credit $11,000 (1) Interest Expense debit $10,000 and (2) Cash credit $10,000 (1) Cash debit $20,000 and (2) Interest Expense credit $20,000 (1) Cash debit $22,000, and (2) Interest Expense credit $22,000
An accounting example: Otter Products inc issued bonds on January 1, 2019. Interest to be paid semi-annually. Term in years is 2; Face value of bonds issued is $200,000; Issue Price $206,000; Specified Interest Rate each payment period is 6% Question. Calculate a. the amount of interest paid in cash every payment period. b. The amount of amortization to be recorded at each interest payment date (use straight-line method) c. complete amoritzation table by calculating interest expense and beginning and ending bond carrying amounts at the each period over 2 years. The term is for 2 years however 3 years is showing on the workbook. How do I calcuate the 3rd year if the problem only says the term is 2 years?
Discount Amortization On the first day of the fiscal year, a company issues a $4,600,000, 7%, 6-year bond that pays semiannual interest of $161,000 ($4,600,000 x 7% x ), receiving cash $3,988,436. Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Interest Expense Discount on Bonds Payable Cash 161,000
The debt is amortized by the periodic payment shown. Compute (a) the number of payments required to amortize the debt; (b) the outstanding principal at the time indicated. Debt Principal Debt Payment Payment Interval Interest Rate Conversion Period Outstanding Principal After: $13,000 $1,493 6 months 6% monthly 8th payment
On the first day of the fiscal year, a company issues a $621,000, 11%, 10-year bond that pays semiannual interest of $34,155 ($621,000 × 11% × 1/2), receiving cash of $652,050. Required: Journalize the entry to record the first interest payment and amortization of premium using the straight-line method. Refer to the Chart of Accounts for exact wording of account titles. Chart Of Accounts CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 113 Allowance for Doubtful Accounts 114 Notes Receivable 115 Interest Receivable 121 Merchandise Inventory 122 Supplies 131 Prepaid Insurance 140 Land 151 Building 152 Accumulated Depreciation-Building 153 Equipment 154 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 221 Salaries Payable 231 Sales Tax Payable 241 Notes Payable 242 Interest Payable 251 Bonds Payable 252 Discount on Bonds…
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6. On January 1, Year 1, a $100,000 bond with a 5% annual stated rate is issued at 94 to yield an effective rate of 7%. Interest payments are made each December 31. If the effective interest method is applied, how much interest expense is recognized in Year 1?

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