Take Home Portion Wishful Thinking (WT) School of Management is building a new facility on a piece of donated land. It received a generous cash donation from a local business to support the project, and now needs to borrow additional $10,000,000 to complete the project. Therefore WT School of Mgmt issued $10,000,000 of 6.00% 10-year bonds. These bonds were issued on January 1, 20X1, and pay interest annually on each January 1. The bonds yield 7.00%. WT School of Mgmt incurred $600,000 in bond issue costs related to the bond sale (round up the calculation to the nearest dollar). (a) Prepare the journal entry to record the issuance of the bonds and the related bond issue costs incurred on January 1, 20X1 (b) Prepare a bond amortization schedule up to and including January 1, 20X5, using the effective interest method Date Jan 1, X1 Interest Paid Interest Expense Disc/Prem Amortization Bond Carrying Value Jan 1, X2 Jan 1, X3 Jan 1, X4 Jan 1, X5 2 (c) Assume that on July 1, 20X4, WT School of Mgmt retires 75% of the bonds at a cost of $6,500,000 plus accrued interest. Prepare journal entries to record this retirement (

Take Home Portion Wishful Thinking (WT) School of Management is building a new facility on a piece of donated land. It received a generous cash donation from a local business to support the project, and now needs to borrow additional $10,000,000 to complete the project. Therefore WT School of Mgmt issued $10,000,000 of 6.00% 10-year bonds. These bonds were issued on January 1, 20X1, and pay interest annually on each January 1. The bonds yield 7.00%. WT School of Mgmt incurred $600,000 in bond issue costs related to the bond sale (round up the calculation to the nearest dollar). (a) Prepare the journal entry to record the issuance of the bonds and the related bond issue costs incurred on January 1, 20X1 (b) Prepare a bond amortization schedule up to and including January 1, 20X5, using the effective interest method Date Jan 1, X1 Interest Paid Interest Expense Disc/Prem Amortization Bond Carrying Value Jan 1, X2 Jan 1, X3 Jan 1, X4 Jan 1, X5 2 (c) Assume that on July 1, 20X4, WT School of Mgmt retires 75% of the bonds at a cost of $6,500,000 plus accrued interest. Prepare journal entries to record this retirement (

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 9RE: Dexter Construction Corporation is building a student condominium complex; it started construction...

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Instructions:Prepare the journal entries for the capital projects fund and debt service fund. The capital projects fund records encumbrances.(Hint: Create two separate ledgers and clearly label them to keep the debt service journal entries separate from the capital project journal entries.) The Town of Balloons had the following transactions related to construction of a new library: 1/2/2020: A 20-year 4% general obligation bond with a face value of $6,000,000 was issued with a premium of $60,000. 1/2/2020: The premium was transferred to the debt service fund. 3/1/2020: A contract for construction was signed in the amount of $5,400,000 6/15/2020: Cash of $210,000 was transferred from the general fund to the debt service fund 7/1/2020: Interest of $120,000 and principal of $150,000 are paid on the library bonds. 12/1/2020: Received an invoice for construction completed to date in the amount of $4,700,000 12/15/2020: Paid the construction invoice, less 5% retention to assure any…
Prepare the entries that would be made in the general long-term debt account group for the following events:a. To finance the construction of an art center, $13,000,000 of general obligation term bonds were sold for $12,500,000.b. The general fund allocated $1,300,000 to a debt service fund to begin providing for retirement of the bonds in item (a) at maturity.c. To help finance an addition to the community health center, $6,000,000 of 6%, 10-year serial bonds were sold at 101. $960,000 was transferred from the general fund to the debt service fund to cover the annual interest and the first serial redemption.d. Serial bonds of $600,000 matured and were retired through the debt service fund.
The Town of Presho had the following transactions related to the construction of a new courthouse. (a) 1/2/2020: 20 year 4% General Obligation Serial Bonds with a face value of $6,000,000 are issued at 101. Interest and principle payments are made on Jan. 1 and July 1 of each year. The premium was transferred into the Debt Service Fund. The General Fund will fully fund each payment as they become due. (b) 3/1/2020: Land is purchased for a new courthouse at a cost of $250,000. (c) 3/1/2020: A contract is signed for construction of the new courthouse in the amount of $5,400,000. (d) 6/15/2020: Cash ($210,000) sufficient to cover interest and principal payments for the year less the premium is transferred from the General Fund. (e) 7/1/2020: Interest ($120,000) and principal ($150,000) are paid on the courthouse fund serial bonds. (f) 12/1/2020: Receive an invoice for progress completed to date on the courthouse construction project in the amount of $4,700,000. (g) 12/27/2020: $117,000 is…
the Shannon Township Debt Service Fund accumulates resources to pay its $2 million general obligation debt. The debt is payable in equal annual installments of principal over 10 years with 5% interest on the unpaid principal. Prepare journal entries to record the following transactions in the Debt Service Fund. 1. The Township levies a special property tax amounting to $500,000 to pay debt service on its long-term general obligation debt. 2. All the property taxes levied for debt service purposes are collected. 3. The Township invests $150,000 in a six-month certificate of deposit. 4. Debt service (interest of $100,000 and principal of $200,000) becomes due to bondholders. 5. The certificate of deposit in c. matures and the Township receives a total of $153,000, which includes $3,000 of interest.
(B) The City of Presho had the following transactions related to the construction of a new courthouse. (1) 1/2/2017: 20 year 4% General Obligation Serial Bonds with a face value of $5,000,000 are issued at 102. Interest and principle payments are made on Jan. 1 and July 1 of each year. The premium was transferred into the Debt Service Fund. The General Fund will fully fund each payment as they become due. (2) 3/1/2017: Land is purchased for a new courthouse at a cost of $300,000. (3) 3/1/2017: A contract is signed for construction of the new courthouse in the amount of $4,300,000. (4) 6/15/2017: Cash ($225,000) sufficient to cover interest and principal payments for the year less the premium is transferred from the General Fund. (5) 7/1/2017: Interest ($100,000) and principal ($125,000) are paid on the courthouse fund serial bonds. (6) 12/1/2017: Receive an invoice for progress completed to date on the courthouse construction project in the amount of $3,700,000. (7) 12/27/2017: $97,500…
Dexter Construction Corporation is building a student condominium complex; it started construction on January 1, Year 1. Dexter borrowed 2.5 million on January 1 specifically for the project by issuing a 10%, 5-vear, 2.5 million note, which is payable on December 31 of Year 3. Dexter also had a 12%, 5-year, 3 million note payable and a 10%, 10-year, 1.8 million note payable outstanding all year. Calculate the weighted average interest rate on the non-construction-specific debt for Year 1. RE10-9 Refer to RE10-8. In Year 1, Dexter incurred costs as follows: Calculate Dexters weighted average accumulated expenditures.
hrd.4
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4. Izki City borrowed OMR1,800,000 secured by an 8-year mortgage note. The cash from the note was used to purchase a building for vehicle and equipment maintenance. Show how these two transactions should be recorded in the General Fund.
Topic: Accounting For Non-Profit Organization
The following events occurred as part of the operations of Kronke Private University for the year 2018 (all amounts are in 000’s): a. To construct a new business building, the university floated at par a $20,000,000, 8% serial bond issued on July 1. Interest is to be paid on December 31 and June 30. In addition, contributions from the community specifically for the new building totaled $5,000,000. b. Payments for construction to date total $7,000,000. c. Interest payments are made on December 31. d. Construction of the building is completed at an additional cost of $18,000,000. Payment is made for $16,000,000; the balance will be paid in one year under a retained percentage agreement. Institutional policy is to release donor restrictions when assets are placed in service. e. The first bond serial payment of $2,000,000 plus interest is paid on December 31. f. A gift of land and a building was received, appraised at $200,000 and $350,000, respectively. The gift was made on the condition…
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