(a-1) 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 M on January 1, 2014.

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 10, Problem 10.11BP

To determine

(a-1)

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 M on January 1, 2014.

(a-2)

To determine

To Prepare: The journal entry to record the accrued interest expense and premium on amortize bond for Company M on December 31, 2014.

(a-3)

To determine

To Prepare: The journal entry to record the payment of interest of Company M on January 1, 2015.

(a-4)

To determine

To Prepare: The journal entry to record the accrued interest expense and discount on amortize bond for Company M on December 31, 2015.

(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 M.

(c-1)

To determine

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

(c-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

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 10, Problem 10.11BP

To determine

(a-1)

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 M on January 1, 2014.

(a-2)

To determine

To Prepare: The journal entry to record the accrued interest expense and premium on amortize bond for Company M on December 31, 2014.

(a-3)

To determine

To Prepare: The journal entry to record the payment of interest of Company M on January 1, 2015.

(a-4)

To determine

To Prepare: The journal entry to record the accrued interest expense and discount on amortize bond for Company M on December 31, 2015.

(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 M.

(c-1)

To determine

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

(c-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 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 10, Problem 10.11BP

To determine

(a-1)

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 M on January 1, 2014.

(a-2)

To determine

To Prepare: The journal entry to record the accrued interest expense and premium on amortize bond for Company M on December 31, 2014.

(a-3)

To determine

To Prepare: The journal entry to record the payment of interest of Company M on January 1, 2015.

(a-4)

To determine

To Prepare: The journal entry to record the accrued interest expense and discount on amortize bond for Company M on December 31, 2015.

(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 M.

(c-1)

To determine

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

(c-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

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 10, Problem 10.11BP

To determine

(a-1)

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 M on January 1, 2014.

(a-2)

To determine

To Prepare: The journal entry to record the accrued interest expense and premium on amortize bond for Company M on December 31, 2014.

(a-3)

To determine

To Prepare: The journal entry to record the payment of interest of Company M on January 1, 2015.

(a-4)

To determine

To Prepare: The journal entry to record the accrued interest expense and discount on amortize bond for Company M on December 31, 2015.

(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 M.

(c-1)

To determine

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

(c-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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See solution

Answer 5

Chapter 10, Problem 10.11BP

To determine

(a-1)

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 M on January 1, 2014.

(a-2)

To determine

To Prepare: The journal entry to record the accrued interest expense and premium on amortize bond for Company M on December 31, 2014.

(a-3)

To determine

To Prepare: The journal entry to record the payment of interest of Company M on January 1, 2015.

(a-4)

To determine

To Prepare: The journal entry to record the accrued interest expense and discount on amortize bond for Company M on December 31, 2015.

(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 M.

(c-1)

To determine

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

(c-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 10.11BP

To determine

(a-1)

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 M on January 1, 2014.

Answer 7

Chapter 10, Problem 10.11BP

To determine

(a-1)

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 M on January 1, 2014.

Answer 8

(a-2)

To determine

To Prepare: The journal entry to record the accrued interest expense and premium on amortize bond for Company M on December 31, 2014.

Answer 9

(a-2)

To determine

To Prepare: The journal entry to record the accrued interest expense and premium on amortize bond for Company M on December 31, 2014.

Answer 10

(a-3)

To determine

To Prepare: The journal entry to record the payment of interest of Company M on January 1, 2015.

Answer 11

(a-3)

To determine

To Prepare: The journal entry to record the payment of interest of Company M on January 1, 2015.

Answer 12

(a-4)

To determine

To Prepare: The journal entry to record the accrued interest expense and discount on amortize bond for Company M on December 31, 2015.

Answer 13

(a-4)

To determine

To Prepare: The journal entry to record the accrued interest expense and discount on amortize bond for Company M on December 31, 2015.

Answer 14

(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 M.

Answer 15

(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 M.

Answer 16

(c-1)

To determine

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

Answer 17

(c-1)

To determine

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

Answer 18

(c-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 19

(c-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 20

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Answer 21

Expert Solution & Answer

Answer 22

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Answer 23

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 journal entry to record the accrued interest expense and premium on amortize bond for Company M on December 31, 2014.

To Prepare: The journal entry to record the payment of interest of Company M on January 1, 2015.

To Prepare: The journal entry to record the accrued interest expense and discount on amortize bond for Company M on December 31, 2015.

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

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

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 M.