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. Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value. Effective-interest amortization method: Effective-interest amortization method it is an amortization model that apportions the amount of bond discount or premium based on the market interest rate. To prepare : Journal entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 2016.

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Answer 1

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Chapter 14, Problem 14.5APR

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.

Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value.

Effective-interest amortization method: Effective-interest amortization method it is an amortization model that apportions the amount of bond discount or premium based on the market interest rate.

To prepare: Journal entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 2016.

2(a)

To determine

To prepare: Journal entry to record first interest payment and amortization of bond discount on December 31, 2016.

2 (b)

To determine

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 2017

3.

To determine

The amount of total interest expense for 2016.

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L.L. Bean operates two factories that produce its popular Bean boots (also known as "duck boots") in its home state of Maine. Since L.L. Bean prides itself on manufacturing its boots in Maine and not outsourcing, backorders for its boots can be high. In 2014, L.L. Bean sold about 450,000 pairs of the boots. At one point during 2014, it had a backorder level of about 100,000 pairs of boots. L.L. Bean can manufacture about 2,200 pairs of its duck boots each day with its factories running 24/7. Question:

L.L. Bean operates two factories that produce its popular Bean boots (also known as "duck boots") in its home state of Maine. Since L.L. Bean prides itself on manufacturing its boots in Maine and not outsourcing, backorders for its boots can be high. In 2014, L.L. Bean sold about 450,000 pairs of the boots. At one point during 2014, it had a backorder level of about 100,000 pairs of boots. L.L. Bean can manufacture about 2,200 pairs of its duck boots each day with its factories running 24/7. In 2015, L.L. Bean expects to sell more than 500,000 pairs of its duck boots. As of late November 2015, the backorder quantity for Bean Boots was estimated to be about 50,000 pairs. Question: 1. Assume there is a 7% sales tax rate in Ohio, where the customer who ordered the boots is located. The sales tax on the order would be $7.63, which L.L. Bean adds to the invoice total. Is the $7.63 added to L.L. Bean's sales revenue? Why or why not?

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Answer 2

Question

Chapter 14, Problem 14.5APR

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.

Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value.

Effective-interest amortization method: Effective-interest amortization method it is an amortization model that apportions the amount of bond discount or premium based on the market interest rate.

To prepare: Journal entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 2016.

2(a)

To determine

To prepare: Journal entry to record first interest payment and amortization of bond discount on December 31, 2016.

2 (b)

To determine

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 2017

3.

To determine

The amount of total interest expense for 2016.

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Answer 3

Question

Chapter 14, Problem 14.5APR

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.

Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value.

Effective-interest amortization method: Effective-interest amortization method it is an amortization model that apportions the amount of bond discount or premium based on the market interest rate.

To prepare: Journal entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 2016.

2(a)

To determine

To prepare: Journal entry to record first interest payment and amortization of bond discount on December 31, 2016.

2 (b)

To determine

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 2017

3.

To determine

The amount of total interest expense for 2016.

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Answer 4

Question

Chapter 14, Problem 14.5APR

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.

Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value.

Effective-interest amortization method: Effective-interest amortization method it is an amortization model that apportions the amount of bond discount or premium based on the market interest rate.

To prepare: Journal entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 2016.

2(a)

To determine

To prepare: Journal entry to record first interest payment and amortization of bond discount on December 31, 2016.

2 (b)

To determine

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 2017

3.

To determine

The amount of total interest expense for 2016.

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Answer 5

Chapter 14, Problem 14.5APR

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.

Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value.

Effective-interest amortization method: Effective-interest amortization method it is an amortization model that apportions the amount of bond discount or premium based on the market interest rate.

To prepare: Journal entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 2016.

2(a)

To determine

To prepare: Journal entry to record first interest payment and amortization of bond discount on December 31, 2016.

2 (b)

To determine

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 2017

3.

To determine

The amount of total interest expense for 2016.

Answer 6

Chapter 14, Problem 14.5APR

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.

Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value.

Effective-interest amortization method: Effective-interest amortization method it is an amortization model that apportions the amount of bond discount or premium based on the market interest rate.

To prepare: Journal entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 2016.

Answer 7

Chapter 14, Problem 14.5APR

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.

Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value.

Effective-interest amortization method: Effective-interest amortization method it is an amortization model that apportions the amount of bond discount or premium based on the market interest rate.

To prepare: Journal entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 2016.

Answer 8

2(a)

To determine

To prepare: Journal entry to record first interest payment and amortization of bond discount on December 31, 2016.

Answer 9

2(a)

To determine

To prepare: Journal entry to record first interest payment and amortization of bond discount on December 31, 2016.

Answer 10

2 (b)

To determine

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 2017

Answer 11

2 (b)

To determine

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 2017

Answer 12

3.

To determine

The amount of total interest expense for 2016.

Answer 13

3.

To determine

The amount of total interest expense for 2016.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 14 - Describe the two distinct obligations incurred by...Ch. 14 - Explain the meaning of each of the following terms...Ch. 14 - If you asked your broker to buy you a 12% bond...Ch. 14 - Prob. 4DQ Ch. 14 - If bonds issued by a corporation are sold at...Ch. 14 - The following data relate to a 2,000,000, 8% bond...Ch. 14 - Bonds Payable has a balance of 5,000,000, and...Ch. 14 - What is a mortgage note?Ch. 14 - Fleeson Company needs additional funds to purchase...Ch. 14 - In what section of the balance sheet would a bond...

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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To prepare: Journal entry to record first interest payment and amortization of bond discount on December 31, 2016.

To prepare: Journal entry to record second interest payment and amortization of bond discount on June 30, 2017

The amount of total interest expense for 2016.

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