Notes payable Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs. Amortization Schedule A schedule that gives the detail about each loan payment and shows the allocation of principal and interest over the life of the note, or bond is called amortization schedule. To Prepare: The journal entry to record the issue of notes by Incorporation A.

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Answer 1

Question

Chapter 14, Problem 14.17E

(1)

To determine

Notes payable

Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.

Amortization Schedule

A schedule that gives the detail about each loan payment and shows the allocation of principal and interest over the life of the note, or bond is called amortization schedule.

To Prepare: The journal entry to record the issue of notes by Incorporation A.

(2)

To determine

To Prepare: The amortization schedule for three year of notes payable.

(3) (a)

To determine

To Prepare: The journal entry to record interest on December 31, 2016.

3 (b)

To determine

To Prepare: The journal entry to record the payment of the note at maturity.

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Blockbuster Co is building a new state of the art Cineplex at a cost of $3,500,000. They received a capital investment of $1,500,000. The remainder of funds will have to be borrowed so they decided to issue bonds. They have issued 10.5%, 5-year bonds. These bonds were issued on January 1st, 2020, and pay semi-annual interest on July 1st and January 1st. The bonds yield 10%. The year-end is December 31st. Requirements: (Show all workings) I. Calculate the proceeds from the sale of the bond. Clearly, show the II. III. IV. amount of the premium or discount and state two reasons, which support the premium or discount calculated. Prepare a bond amortization schedule for the bond's life. Prepare all the journal entries for 2020, 2023 & 2025. Assume that on July 1 2023, Blockbuster Co. retires the bond at a cost of 1,065,000 plus accrued interest, if applicable. Prepare the journal entry to record this retirement.

What is the net income during year 2 on these accounting question?

Answer 2

Question

Chapter 14, Problem 14.17E

(1)

To determine

Notes payable

Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.

Amortization Schedule

A schedule that gives the detail about each loan payment and shows the allocation of principal and interest over the life of the note, or bond is called amortization schedule.

To Prepare: The journal entry to record the issue of notes by Incorporation A.

(2)

To determine

To Prepare: The amortization schedule for three year of notes payable.

(3) (a)

To determine

To Prepare: The journal entry to record interest on December 31, 2016.

3 (b)

To determine

To Prepare: The journal entry to record the payment of the note at maturity.

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Answer 3

Question

Chapter 14, Problem 14.17E

(1)

To determine

Notes payable

Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.

Amortization Schedule

A schedule that gives the detail about each loan payment and shows the allocation of principal and interest over the life of the note, or bond is called amortization schedule.

To Prepare: The journal entry to record the issue of notes by Incorporation A.

(2)

To determine

To Prepare: The amortization schedule for three year of notes payable.

(3) (a)

To determine

To Prepare: The journal entry to record interest on December 31, 2016.

3 (b)

To determine

To Prepare: The journal entry to record the payment of the note at maturity.

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Answer 4

Question

Chapter 14, Problem 14.17E

(1)

To determine

Notes payable

Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.

Amortization Schedule

A schedule that gives the detail about each loan payment and shows the allocation of principal and interest over the life of the note, or bond is called amortization schedule.

To Prepare: The journal entry to record the issue of notes by Incorporation A.

(2)

To determine

To Prepare: The amortization schedule for three year of notes payable.

(3) (a)

To determine

To Prepare: The journal entry to record interest on December 31, 2016.

3 (b)

To determine

To Prepare: The journal entry to record the payment of the note at maturity.

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Answer 5

Chapter 14, Problem 14.17E

(1)

To determine

Notes payable

Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.

Amortization Schedule

A schedule that gives the detail about each loan payment and shows the allocation of principal and interest over the life of the note, or bond is called amortization schedule.

To Prepare: The journal entry to record the issue of notes by Incorporation A.

(2)

To determine

To Prepare: The amortization schedule for three year of notes payable.

(3) (a)

To determine

To Prepare: The journal entry to record interest on December 31, 2016.

3 (b)

To determine

To Prepare: The journal entry to record the payment of the note at maturity.

Answer 6

Chapter 14, Problem 14.17E

(1)

To determine

Notes payable

Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.

Amortization Schedule

A schedule that gives the detail about each loan payment and shows the allocation of principal and interest over the life of the note, or bond is called amortization schedule.

To Prepare: The journal entry to record the issue of notes by Incorporation A.

Answer 7

Chapter 14, Problem 14.17E

(1)

To determine

Notes payable

Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.

Amortization Schedule

A schedule that gives the detail about each loan payment and shows the allocation of principal and interest over the life of the note, or bond is called amortization schedule.

To Prepare: The journal entry to record the issue of notes by Incorporation A.

Answer 8

(2)

To determine

To Prepare: The amortization schedule for three year of notes payable.

Answer 9

(2)

To determine

To Prepare: The amortization schedule for three year of notes payable.

Answer 10

(3) (a)

To determine

To Prepare: The journal entry to record interest on December 31, 2016.

Answer 11

(3) (a)

To determine

To Prepare: The journal entry to record interest on December 31, 2016.

Answer 12

3 (b)

To determine

To Prepare: The journal entry to record the payment of the note at maturity.

Answer 13

3 (b)

To determine

To Prepare: The journal entry to record the payment of the note at maturity.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 14 - How is periodic interest determined for...Ch. 14 - As a general rule, how should long-term...Ch. 14 - How are bonds and notes the same? How do they...Ch. 14 - What information is contained in a bond indenture?...Ch. 14 - Prob. 14.5Q Ch. 14 - How is the price determined for a bond (or bond...Ch. 14 - A zero-coupon bond pays no interest. Explain.Ch. 14 - Prob. 14.8Q Ch. 14 - Compare the two commonly used methods of...Ch. 14 - Prob. 14.10Q

To Prepare: The amortization schedule for three year of notes payable.

To Prepare: The journal entry to record interest on December 31, 2016.

To Prepare: The journal entry to record the payment of the note at maturity.

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