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Business Accounting Loose Leaf for Fundamental Accounting Principles

INTRODUCTION When bonds are issued at the price higher than its par value, then it is termed as bonds issued at premium. In other words, premium on bonds is the difference par value and issue price. Long term debt refers to the amount of money borrowed by the company for more than 1 year usually by issuing bonds or debenture. The interest cost is a type of cost which the borrower has to pay irrespective of its profit or loss. Bonds or debenture which can be converted into shares are known as convertible bonds or debenture. TO IDENTIFY 1) We have to identify the A’s long term debt on September, 2015. SOLUTION 1. As per the financial statements of A inc. the long term debt on September, 2015 is $53,463 million. EXPLANATION It is stated in the financial statement of Apple’s .Therefore amount of long term debt is $ 53,463 million. TO CALCULATE 2) we have to calculate the amount of interest paid on convertible debenture. SOLUTION The amount of interest paid on convertible debenture is $4,250,000. EXPLANATION 2. The interest can be calculated as int e r e s t = d e b e n t u r e * r a t e o f int e r e s t = 100 m i l l i o n * 4.25 % = $ 4 , 250 , 000 TO DETERMINE 3) we have to determine the journal entry on conversion. SOLUTION 3. In the given case A inc. has 100 million of debt which can be converted into equity shares. The journal entry required at the time of conversion is Date Account titles DR. CR. Jan 1 Bonds payable 100 million Common stock 100 million ( to record the sale of bond at par) TO DETERMINE 4.We have to determine whether it has issued any additional long term debt. SOLUTION A corporation has not issued additional long term debt. EXPLANATION After September 26,2015 , A corporation has not issued additional long term debt .it is because according to the financial statement , the borrowed money with A corporation is still 100 million.

INTRODUCTION When bonds are issued at the price higher than its par value, then it is termed as bonds issued at premium. In other words, premium on bonds is the difference par value and issue price. Long term debt refers to the amount of money borrowed by the company for more than 1 year usually by issuing bonds or debenture. The interest cost is a type of cost which the borrower has to pay irrespective of its profit or loss. Bonds or debenture which can be converted into shares are known as convertible bonds or debenture. TO IDENTIFY 1) We have to identify the A’s long term debt on September, 2015. SOLUTION 1. As per the financial statements of A inc. the long term debt on September, 2015 is $53,463 million. EXPLANATION It is stated in the financial statement of Apple’s .Therefore amount of long term debt is $ 53,463 million. TO CALCULATE 2) we have to calculate the amount of interest paid on convertible debenture. SOLUTION The amount of interest paid on convertible debenture is $4,250,000. EXPLANATION 2. The interest can be calculated as int e r e s t = d e b e n t u r e * r a t e o f int e r e s t = 100 m i l l i o n * 4.25 % = $ 4 , 250 , 000 TO DETERMINE 3) we have to determine the journal entry on conversion. SOLUTION 3. In the given case A inc. has 100 million of debt which can be converted into equity shares. The journal entry required at the time of conversion is Date Account titles DR. CR. Jan 1 Bonds payable 100 million Common stock 100 million ( to record the sale of bond at par) TO DETERMINE 4.We have to determine whether it has issued any additional long term debt. SOLUTION A corporation has not issued additional long term debt. EXPLANATION After September 26,2015 , A corporation has not issued additional long term debt .it is because according to the financial statement , the borrowed money with A corporation is still 100 million.

Loose Leaf for Fundamental Accounting Principles

Loose Leaf for Fundamental Accounting Principles

23rd Edition

ISBN: 9781259687709

Author: John J Wild, Ken Shaw Accounting Professor, Barbara Chiappetta Fundamental Accounting Principles

Publisher: McGraw-Hill Education

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Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue autho…

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Loose Leaf for Fundamental Accounting Principles

Ch. 14 - Prob. 1DQ Ch. 14 - Prob. 2DQ Ch. 14 - Prob. 3DQ Ch. 14 - Prob. 4DQ Ch. 14 - Prob. 5DQ Ch. 14 - Prob. 6DQ Ch. 14 - Prob. 7DQ Ch. 14 - Prob. 8DQ Ch. 14 - Prob. 9DQ Ch. 14 - Prob. 10DQ

Ch. 14 - Prob. 11DQ Ch. 14 - Prob. 12DQ Ch. 14 - Prob. 13DQ Ch. 14 - Prob. 14DQ Ch. 14 - Prob. 15DQ Ch. 14 - Prob. 16DQ Ch. 14 - Prob. 17DQ Ch. 14 - Prob. 18DQ Ch. 14 - Prob. 19DQ Ch. 14 - Prob. 20DQ Ch. 14 - Prob. 1QS Ch. 14 - Prob. 2QS Ch. 14 - Prob. 3QS Ch. 14 - Prob. 4QS Ch. 14 - Prob. 5QS Ch. 14 - Prob. 6QS Ch. 14 - Prob. 7QS Ch. 14 - Prob. 8QS Ch. 14 - Prob. 9QS Ch. 14 - Prob. 10QS Ch. 14 - Prob. 11QS Ch. 14 - Prob. 12QS Ch. 14 - Prob. 13QS Ch. 14 - Prob. 14QS Ch. 14 - Prob. 15QS Ch. 14 - Prob. 16QS Ch. 14 - Prob. 17QS Ch. 14 - Prob. 18QS Ch. 14 - Prob. 19QS Ch. 14 - Prob. 20QS Ch. 14 - Prob. 1E Ch. 14 - Prob. 2E Ch. 14 - Prob. 3E Ch. 14 - Prob. 4E Ch. 14 - Prob. 5E Ch. 14 - Prob. 6E Ch. 14 - Prob. 7E Ch. 14 - Prob. 8E Ch. 14 - Prob. 9E Ch. 14 - Prob. 10E Ch. 14 - Prob. 11E Ch. 14 - Prob. 12E Ch. 14 - Prob. 13E Ch. 14 - Prob. 14E Ch. 14 - Prob. 15E Ch. 14 - Prob. 16E Ch. 14 - Prob. 17E Ch. 14 - Prob. 18E Ch. 14 - Prob. 19E Ch. 14 - Prob. 20E Ch. 14 - Prob. 1APSA Ch. 14 - Prob. 2APSA Ch. 14 - Prob. 3APSA Ch. 14 - Prob. 4APSA Ch. 14 - Prob. 5APSA Ch. 14 - Prob. 6APSA Ch. 14 - Prob. 7APSA Ch. 14 - Prob. 8APSA Ch. 14 - Prob. 9APSA Ch. 14 - Prob. 10APSA Ch. 14 - Prob. 11APSA Ch. 14 - Prob. 1BPSB Ch. 14 - Prob. 2BPSB Ch. 14 - Prob. 3BPSB Ch. 14 - Prob. 4BPSB Ch. 14 - Prob. 5BPSB Ch. 14 - Prob. 6BPSB Ch. 14 - Prob. 7BPSB Ch. 14 - Prob. 8BPSB Ch. 14 - Prob. 9BPSB Ch. 14 - Prob. 10BPSB Ch. 14 - Problem 14-11EC Capital lease accounting C3 Braun...Ch. 14 - Prob. 14SP Ch. 14 - Prob. 1BTN Ch. 14 - Prob. 2BTN Ch. 14 - Prob. 3BTN Ch. 14 - Prob. 4BTN Ch. 14 - Prob. 5BTN Ch. 14 - Prob. 6BTN Ch. 14 - Prob. 7BTN Ch. 14 - Prob. 8BTN Ch. 14 - Prob. 9BTN

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