Bonds Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond. Straight-line amortization bond Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment. Effective interest rate of amortization bond Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but a constant percentage rate. To Prepare: The journal entry to record the issuance of bonds of Company J on January 1, 2014.

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Answer 1

Question

Chapter 10, Problem 10.11AP

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but a constant percentage rate.

To Prepare: The journal entry to record the issuance of bonds of Company J on January 1, 2014.

(b)

To determine

To Prepare: The proper long-term liabilities section balance sheet presentation for the liability of bonds payable on 31^st December 2015 of Company J.

(c) (1)

To determine

To Prepare: The interest expenses amount shows in the year 2015 of Company J.

(2)

To determine

To Ascertain: If the bond interest expense reported in the year 2015 is greater than the amount reported, lesser than the amount reported or same amount reported, if the Company used the straight-line method of amortization.

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Answer 2

Question

Chapter 10, Problem 10.11AP

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but a constant percentage rate.

To Prepare: The journal entry to record the issuance of bonds of Company J on January 1, 2014.

(b)

To determine

To Prepare: The proper long-term liabilities section balance sheet presentation for the liability of bonds payable on 31^st December 2015 of Company J.

(c) (1)

To determine

To Prepare: The interest expenses amount shows in the year 2015 of Company J.

(2)

To determine

To Ascertain: If the bond interest expense reported in the year 2015 is greater than the amount reported, lesser than the amount reported or same amount reported, if the Company used the straight-line method of amortization.

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Answer 3

Question

Chapter 10, Problem 10.11AP

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but a constant percentage rate.

To Prepare: The journal entry to record the issuance of bonds of Company J on January 1, 2014.

(b)

To determine

To Prepare: The proper long-term liabilities section balance sheet presentation for the liability of bonds payable on 31^st December 2015 of Company J.

(c) (1)

To determine

To Prepare: The interest expenses amount shows in the year 2015 of Company J.

(2)

To determine

To Ascertain: If the bond interest expense reported in the year 2015 is greater than the amount reported, lesser than the amount reported or same amount reported, if the Company used the straight-line method of amortization.

Expert Solution & Answer

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Answer 4

Question

Chapter 10, Problem 10.11AP

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but a constant percentage rate.

To Prepare: The journal entry to record the issuance of bonds of Company J on January 1, 2014.

(b)

To determine

To Prepare: The proper long-term liabilities section balance sheet presentation for the liability of bonds payable on 31^st December 2015 of Company J.

(c) (1)

To determine

To Prepare: The interest expenses amount shows in the year 2015 of Company J.

(2)

To determine

To Ascertain: If the bond interest expense reported in the year 2015 is greater than the amount reported, lesser than the amount reported or same amount reported, if the Company used the straight-line method of amortization.

Expert Solution & Answer

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Answer 5

Chapter 10, Problem 10.11AP

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but a constant percentage rate.

To Prepare: The journal entry to record the issuance of bonds of Company J on January 1, 2014.

(b)

To determine

To Prepare: The proper long-term liabilities section balance sheet presentation for the liability of bonds payable on 31^st December 2015 of Company J.

(c) (1)

To determine

To Prepare: The interest expenses amount shows in the year 2015 of Company J.

(2)

To determine

To Ascertain: If the bond interest expense reported in the year 2015 is greater than the amount reported, lesser than the amount reported or same amount reported, if the Company used the straight-line method of amortization.

Answer 6

Chapter 10, Problem 10.11AP

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but a constant percentage rate.

To Prepare: The journal entry to record the issuance of bonds of Company J on January 1, 2014.

Answer 7

Chapter 10, Problem 10.11AP

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but a constant percentage rate.

To Prepare: The journal entry to record the issuance of bonds of Company J on January 1, 2014.

Answer 8

(b)

To determine

To Prepare: The proper long-term liabilities section balance sheet presentation for the liability of bonds payable on 31^st December 2015 of Company J.

Answer 9

(b)

To determine

To Prepare: The proper long-term liabilities section balance sheet presentation for the liability of bonds payable on 31^st December 2015 of Company J.

Answer 10

(c) (1)

To determine

To Prepare: The interest expenses amount shows in the year 2015 of Company J.

Answer 11

(c) (1)

To determine

To Prepare: The interest expenses amount shows in the year 2015 of Company J.

Answer 12

(2)

To determine

To Ascertain: If the bond interest expense reported in the year 2015 is greater than the amount reported, lesser than the amount reported or same amount reported, if the Company used the straight-line method of amortization.

Answer 13

(2)

To determine

To Ascertain: If the bond interest expense reported in the year 2015 is greater than the amount reported, lesser than the amount reported or same amount reported, if the Company used the straight-line method of amortization.

Answer 14

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Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 10 - Prob. 1Q Ch. 10 - Prob. 2Q Ch. 10 - Prob. 3Q Ch. 10 - Prob. 4Q Ch. 10 - Prob. 5Q Ch. 10 - (a) Identify three taxes commonly paid by...Ch. 10 - Prob. 7Q Ch. 10 - Prob. 8Q Ch. 10 - Contrast these types of bonds: (a) Secured and...Ch. 10 - Prob. 10Q

To Prepare: The proper long-term liabilities section balance sheet presentation for the liability of bonds payable on 31st December 2015 of Company J.

To Prepare: The interest expenses amount shows in the year 2015 of Company J.

To Ascertain: If the bond interest expense reported in the year 2015 is greater than the amount reported, lesser than the amount reported or same amount reported, if the Company used the straight-line method of amortization.

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Chapter 10 Solutions

To Prepare: The proper long-term liabilities section balance sheet presentation for the liability of bonds payable on 31^st December 2015 of Company J.