Horngren's Financial & Managerial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (5th Edition)

5th Edition

ISBN: 9780134078908

Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura

Publisher: PEARSON

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Textbook Question

Chapter 12, Problem 12.32AP

Analyzing, journalizing, and reporting bond transactions

Bob's Hamburgers issued 8%, 10-year bonds payable at 70 on December 31, 2016. At December 31, 2018, Bob reported the bonds payable as follows:

Long-term Liabilities :
Bonds Payable	$ 300,000
Less: Discount on Bonds Payable	72,000	$ 228,000

Bob's pays semiannual interest each June 30 and December 31.

Requirements

1. Answer the following questions about Bob's bonds payable:

a. What is the maturity value of the bonds?

b. What is the carrying amount of the bonds at December 31, 2 018?

c. What is the semiannual cash interest payment on the bonds?

d. How much interest expense should the company record each year?

2. Record the June 30, 2018, semiannual interest payment and amortization of discount.

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Chapter 12, Problem 12.31AP

Chapter 12, Problem 12.33AP

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Chapter 12 Solutions

Horngren's Financial & Managerial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (5th Edition)

Ch. 12 - Flipco signed a 10-year note payable on January 1,...Ch. 12 - Daniels's bonds payable carry a stated interest...Ch. 12 - A bond that matures in installments at regular...Ch. 12 - Prob. 4QC Ch. 12 - Nicholas Smith Fitness Gym has 700,000 of 20-year...Ch. 12 - Prob. 6QC Ch. 12 - Prob. 7QC Ch. 12 - The debt to equity ratio is calculated as a. Total...Ch. 12 - Mike Gordon wishes to have 80,000 in five years....Ch. 12 - Prob. 10BQC

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Solution Summary: The author explains that bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

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