ACCOUNTING PRINCIPLES 222 5/16 >C<
ACCOUNTING PRINCIPLES 222 5/16 >C<
2nd Edition
ISBN: 9781323461525
Author: Horngren
Publisher: PEARSON C
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Chapter 14, Problem 2QC

Daniels's bonds payable carry a stated interest rate of 5%, and the market rate of interest is 7%. The issue price of the Daniels's bonds will be at
Learning Objective 2

  1. par value.
  2. a premium
  3. face value, d a discount.

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(Learning Objectives 1, 6: Issue bonds at a discount; amortize using thestraight-line method; report bonds payable and accrued interest payable on the balancesheet) On February 28, 2018, Dolphin Corp. issued 10%, 20-year bonds payable with a facevalue of $2,100,000. The bonds pay interest on February 28 and August 31. The companyamortizes bond discount using the straight-line method.Requirements1. If the market interest rate is 9% when Dolphin Corp. issues its bonds, will the bonds bepriced at par, at a premium, or at a discount? Explain.2. If the market interest rate is 11% when Dolphin Corp. issues its bonds, will the bonds bepriced at par, at a premium, or at a discount? Explain.3. Assume that the issue price of the bonds is 94. Journalize the following bonds payabletransactions.a. Issuance of the bonds on February 28, 2018b. Payment of interest and amortization of the bond discount on August 31, 2018c. Accrual of interest and amortization of the bond discount on December 31, 2018…
(Learning Objective 2: Issue bonds payable (premium); record interest paymentand the related bond amortization using the effective-interest method) On June 30, 2018,the market interest rate is 9%. Randall Corporation issues $600,000 of 10%, 15-year bondspayable. The bonds pay interest on June 30 and December 31. The company amortizes bondpremium using the effective-interest method.Requirements1. Use the PV function in Excel to calculate the issue price of the bonds.2. Prepare a bond amortization table for the term of the bonds using Excel.3. Record the issuance of bonds payable on June 30, 2018; the payment of interest onDecember 31, 2018; and the payment of interest on June 30, 2019.
(Learning Objective 2: Issue bonds payable (premium); record interest paymentand the related bond amortization using the effective-interest method) On June 30, 2018,the market interest rate is 9%. Ramsey Corporation issues $550,000 of 12%, 20-year bondspayable. The bonds pay interest on June 30 and December 31. The company amortizes bondpremium using the effective-interest method.Requirements1. Use the PV function in Excel to calculate the issue price of the bonds.2. Prepare a bond amortization table for the term of the bonds using Excel.3. Record the issuance of bonds payable on June 30, 2018; the payment of interest onDecember 31, 2018; and the payment of interest on June 30, 2019.

Chapter 14 Solutions

ACCOUNTING PRINCIPLES 222 5/16 >C<

Ch. 14 - Prob. 1RQCh. 14 - Prob. 2RQCh. 14 - Prob. 3RQCh. 14 - Prob. 4RQCh. 14 - Prob. 5RQCh. 14 - Prob. 6RQCh. 14 - Prob. 7RQCh. 14 - Prob. 8RQCh. 14 - Prob. 9RQCh. 14 - Prob. 10RQCh. 14 - Prob. 11RQCh. 14 - Prob. 12RQCh. 14 - 13. What type of account is Premium on Bonds...Ch. 14 - Prob. 14RQCh. 14 - Prob. 15RQCh. 14 - Prob. 16RQCh. 14 - What does the debt to equity ratio show, and how...Ch. 14 - Prob. 18ARQCh. 14 - Prob. 19ARQCh. 14 - Prob. 20ARQCh. 14 - Prob. 21BRQCh. 14 - Prob. S14.1SECh. 14 - Prob. S14.2SECh. 14 - Prob. S14.3SECh. 14 - Pricing bonds Bond prices depend on the market...Ch. 14 - Determining bond amounts Quick Drive-Ins borrowed...Ch. 14 - Journalizing bond transactions Piper Company...Ch. 14 - Journalizing bond transactions Ogden issued a...Ch. 14 - Journalizing bond transactions Watson Mutual...Ch. 14 - Journalizing bond transactions including...Ch. 14 - Retiring bonds payable before maturity On January...Ch. 14 - Preparing the liabilities section of the balance...Ch. 14 - Prob. S14.12SECh. 14 - Prob. S14A.13SECh. 14 - Determining the present value of bond at issuance...Ch. 14 - Using the effective-interest amortization method...Ch. 14 - Prob. S14B.16SECh. 14 - Accounting for long-term notes payable...Ch. 14 - Preparing an amortization schedule and recording...Ch. 14 - Analyzing alternative plans to raise money AF...Ch. 14 - Determining bond prices and interest expense Nooks...Ch. 14 - Journalizing bond issuance and interest payments...Ch. 14 - Journalizing bond issuance and interest payments...Ch. 14 - Prob. E14.23ECh. 14 - Journalizing bond issuance and interest payments...Ch. 14 - Retiring bonds payable before maturity Parkview...Ch. 14 - Prob. E14.26ECh. 14 - Prob. E14.27ECh. 14 - Prob. E14.28ECh. 14 - Prob. E14.29ECh. 14 - Prob. E14A.30ECh. 14 - A Journalizing liability transactions and...Ch. 14 - Analyzing, journalizing, and reporting bond...Ch. 14 - Analyzing and journalizing bond transactions On...Ch. 14 - Analyzing and journalizing bond transactions On...Ch. 14 - Prob. P14.35APGACh. 14 - Determining the present value of bonds payable and...Ch. 14 - Determining the present value of bands payable and...Ch. 14 - Journalizing liability transactions and reporting...Ch. 14 - Prob. P14.39BPGBCh. 14 - Prob. P14.40BPGBCh. 14 - Prob. P14.41BPGBCh. 14 - Prob. P14.42BPGBCh. 14 - Prob. P14.43BPGBCh. 14 - Prob. P14AB.44BPGBCh. 14 - Describing bonds and journalizing transactions for...Ch. 14 - Decision Case 14-1 The following questions are not...Ch. 14 - Ethical Issue 14-1 Raffle's Kids, a nonprofit...Ch. 14 - Prob. 14.1FCCh. 14 - Prob. 14.1FSC
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