Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations. Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations. Stated interest rate: It refers to the interest rate that is stated on the face of the bonds. Market interest rate: It refers to the interest rate that the lenders expect, or demands from the borrower to part with their money as loan to them. Time value of money: Any amount invested today earns an additional income, called interest income, after a certain period. This is called as time value of money. Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value. Straight-line amortization method: It is a method of bond amortization that spreads the amount of the bond discount or bond premium equally over the interest period. In this method, the amount of bond discount or bond premium is allocated equally for each interest period over the life of the bond. To identify: The issue price of bonds.

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Answer 1

Question

Chapter 12, Problem 47CP

1.

To determine

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.

Stated interest rate: It refers to the interest rate that is stated on the face of the bonds.

Market interest rate: It refers to the interest rate that the lenders expect, or demands from the borrower to part with their money as loan to them.

Time value of money: Any amount invested today earns an additional income, called interest income, after a certain period. This is called as time value of money.

Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value.

Straight-line amortization method: It is a method of bond amortization that spreads the amount of the bond discount or bond premium equally over the interest period. In this method, the amount of bond discount or bond premium is allocated equally for each interest period over the life of the bond.

To identify: The issue price of bonds.

2.

a.

To determine

To prepare: Journal entry to record cash received from the bond issue.

b.

To determine

To prepare: Journal entry to record cash received from the bond issue.

c.

To determine

To prepare: Journal entry to record semiannual interest and amortization of discount on bonds using straight-line amortization method.

d.

To determine

To prepare: Journal entry to record the payment on the mortgage payable for 2020.

3.

To determine

To calculate: Total interest expense incurred in 2020.

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Chapter 18 Homework 8 1 points QS 18-4 (Algo) Measuring costs using high-low method LO P1 Saved The following information is available for a company's maintenance cost over the last seven months. 100 190 110 Month Units Produced eBook June July August September October November 200 230 Ask December Maintenance Cost $ 3,950 5,390 4,110 ETT 140 4,590 5,550 6,030 3,150 Print References Mc Graw Hill Using the high-low method, estimate both the fixed and variable components of its maintenance cost. High-Low method - Calculation of variable cost per unit produced Cost at highest volume - Cost at lowest volume Highest volume-Lowest volume Total cost at the highest volume Variable costs at highest volume: Highest volume Variable cost per unit produced Total variable costs at highest volume Total fixed costs Total cost at the lowest volume Variable costs at lowest volume: Lowest volume Variable cost per unit produced Total variable costs at lowest volume Total fixed costs 230 units $ 3,150.00…

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Answer 2

Question

Chapter 12, Problem 47CP

1.

To determine

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.

Stated interest rate: It refers to the interest rate that is stated on the face of the bonds.

Market interest rate: It refers to the interest rate that the lenders expect, or demands from the borrower to part with their money as loan to them.

Time value of money: Any amount invested today earns an additional income, called interest income, after a certain period. This is called as time value of money.

Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value.

Straight-line amortization method: It is a method of bond amortization that spreads the amount of the bond discount or bond premium equally over the interest period. In this method, the amount of bond discount or bond premium is allocated equally for each interest period over the life of the bond.

To identify: The issue price of bonds.

2.

a.

To determine

To prepare: Journal entry to record cash received from the bond issue.

b.

To determine

To prepare: Journal entry to record cash received from the bond issue.

c.

To determine

To prepare: Journal entry to record semiannual interest and amortization of discount on bonds using straight-line amortization method.

d.

To determine

To prepare: Journal entry to record the payment on the mortgage payable for 2020.

3.

To determine

To calculate: Total interest expense incurred in 2020.

Expert Solution & Answer

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Answer 3

Question

Chapter 12, Problem 47CP

1.

To determine

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.

Stated interest rate: It refers to the interest rate that is stated on the face of the bonds.

Market interest rate: It refers to the interest rate that the lenders expect, or demands from the borrower to part with their money as loan to them.

Time value of money: Any amount invested today earns an additional income, called interest income, after a certain period. This is called as time value of money.

Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value.

Straight-line amortization method: It is a method of bond amortization that spreads the amount of the bond discount or bond premium equally over the interest period. In this method, the amount of bond discount or bond premium is allocated equally for each interest period over the life of the bond.

To identify: The issue price of bonds.

2.

a.

To determine

To prepare: Journal entry to record cash received from the bond issue.

b.

To determine

To prepare: Journal entry to record cash received from the bond issue.

c.

To determine

To prepare: Journal entry to record semiannual interest and amortization of discount on bonds using straight-line amortization method.

d.

To determine

To prepare: Journal entry to record the payment on the mortgage payable for 2020.

3.

To determine

To calculate: Total interest expense incurred in 2020.

Expert Solution & Answer

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Answer 4

Question

Chapter 12, Problem 47CP

1.

To determine

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.

Stated interest rate: It refers to the interest rate that is stated on the face of the bonds.

Market interest rate: It refers to the interest rate that the lenders expect, or demands from the borrower to part with their money as loan to them.

Time value of money: Any amount invested today earns an additional income, called interest income, after a certain period. This is called as time value of money.

Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value.

Straight-line amortization method: It is a method of bond amortization that spreads the amount of the bond discount or bond premium equally over the interest period. In this method, the amount of bond discount or bond premium is allocated equally for each interest period over the life of the bond.

To identify: The issue price of bonds.

2.

a.

To determine

To prepare: Journal entry to record cash received from the bond issue.

b.

To determine

To prepare: Journal entry to record cash received from the bond issue.

c.

To determine

To prepare: Journal entry to record semiannual interest and amortization of discount on bonds using straight-line amortization method.

d.

To determine

To prepare: Journal entry to record the payment on the mortgage payable for 2020.

3.

To determine

To calculate: Total interest expense incurred in 2020.

Expert Solution & Answer

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Answer 5

Chapter 12, Problem 47CP

1.

To determine

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.

Stated interest rate: It refers to the interest rate that is stated on the face of the bonds.

Market interest rate: It refers to the interest rate that the lenders expect, or demands from the borrower to part with their money as loan to them.

Time value of money: Any amount invested today earns an additional income, called interest income, after a certain period. This is called as time value of money.

Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value.

Straight-line amortization method: It is a method of bond amortization that spreads the amount of the bond discount or bond premium equally over the interest period. In this method, the amount of bond discount or bond premium is allocated equally for each interest period over the life of the bond.

To identify: The issue price of bonds.

2.

a.

To determine

To prepare: Journal entry to record cash received from the bond issue.

b.

To determine

To prepare: Journal entry to record cash received from the bond issue.

c.

To determine

To prepare: Journal entry to record semiannual interest and amortization of discount on bonds using straight-line amortization method.

d.

To determine

To prepare: Journal entry to record the payment on the mortgage payable for 2020.

3.

To determine

To calculate: Total interest expense incurred in 2020.

Answer 6

Chapter 12, Problem 47CP

1.

To determine

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.

Stated interest rate: It refers to the interest rate that is stated on the face of the bonds.

Market interest rate: It refers to the interest rate that the lenders expect, or demands from the borrower to part with their money as loan to them.

Time value of money: Any amount invested today earns an additional income, called interest income, after a certain period. This is called as time value of money.

Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value.

Straight-line amortization method: It is a method of bond amortization that spreads the amount of the bond discount or bond premium equally over the interest period. In this method, the amount of bond discount or bond premium is allocated equally for each interest period over the life of the bond.

To identify: The issue price of bonds.

Answer 7

Chapter 12, Problem 47CP

1.

To determine

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.

Stated interest rate: It refers to the interest rate that is stated on the face of the bonds.

Market interest rate: It refers to the interest rate that the lenders expect, or demands from the borrower to part with their money as loan to them.

Time value of money: Any amount invested today earns an additional income, called interest income, after a certain period. This is called as time value of money.

Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value.

Straight-line amortization method: It is a method of bond amortization that spreads the amount of the bond discount or bond premium equally over the interest period. In this method, the amount of bond discount or bond premium is allocated equally for each interest period over the life of the bond.

To identify: The issue price of bonds.

Answer 8

2.

a.

To determine

To prepare: Journal entry to record cash received from the bond issue.

Answer 9

2.

a.

To determine

To prepare: Journal entry to record cash received from the bond issue.

Answer 10

b.

To determine

To prepare: Journal entry to record cash received from the bond issue.

Answer 11

b.

To determine

To prepare: Journal entry to record cash received from the bond issue.

Answer 12

c.

To determine

To prepare: Journal entry to record semiannual interest and amortization of discount on bonds using straight-line amortization method.

Answer 13

c.

To determine

To prepare: Journal entry to record semiannual interest and amortization of discount on bonds using straight-line amortization method.

Answer 14

d.

To determine

To prepare: Journal entry to record the payment on the mortgage payable for 2020.

Answer 15

d.

To determine

To prepare: Journal entry to record the payment on the mortgage payable for 2020.

Answer 16

3.

To determine

To calculate: Total interest expense incurred in 2020.

Answer 17

3.

To determine

To calculate: Total interest expense incurred in 2020.

Answer 18

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Answer 19

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Answer 20

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Answer 21

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To prepare: Journal entry to record cash received from the bond issue.

To prepare: Journal entry to record cash received from the bond issue.

To prepare: Journal entry to record semiannual interest and amortization of discount on bonds using straight-line amortization method.

To prepare: Journal entry to record the payment on the mortgage payable for 2020.

To calculate: Total interest expense incurred in 2020.

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Chapter 12 Solutions