11th Edition

ISBN: 9780133856781

Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura

Publisher: PEARSON

See similar textbooks

Videos

Textbook Question

Chapter 14, Problem P14.33APGA

Analyzing and journalizing bond transactions

On January 1, 2016, Teacher Credit Union (TCU) issued 8%, 20-year bond payable with face value of $400,000. The bonds pay interest on June 30 and December 31.

Requirements

If the market interest rate is 6% when TCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain.
If the market interest rate is 9% when TCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain.
The issue price of the bonds is 96. Journalize the following bond transactions:

Issuance of the bonds on January 1, 2016.
Payment of interest and amortization on June 30, 2016.

Payment of interest and amortization on December 31, 2016.
Retirement of the bond at maturity on December 31, 2035.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 14, Problem P14.32APGA

Chapter 14, Problem P14.34APGA

Students have asked these similar questions

Bella Brands operates with two divisions, Aftershave and Deodorant. The Aftershave Division produces a chemical that the Deodorant Division also uses. The Aftershave Division also sells this chemical to other firms for $10 per ounce. The cost information for the Aftershave Division is as follows: Variable costs per ounce $ 6.00 Fixed costs per ounce $ 15.00 Monthly production capacity 30,000 ounces If the Aftershave Division is not operating at full capacity and is able to supply the Deodorant Division with its needs for the chemical, what is the minimum transfer price that the Aftershave Division will accept? Multiple Choice None of the choices is correct. $10.00 per ounce $6.00 per ounce $15.00 per ounce $3.00 per ounce

Brar Incorporated supplied the following financial information for analysis: Depreciable assets (purchased at the beginning of year 1) $ 4,500,000 Profits before depreciation (all in cash flows at end of year): Year 1 960,000 Year 2 1,400,000 Year 3 2,100,000 Replacement cost of depreciable assets at end of: Year 1 $ 5,000,000 Year 2 6,200,000 Year 3 7,600,000 The assets are depreciated at a rate of 12% per year and have no salvage value. What is the ROI for year 2 using historical cost, net book value? Multiple Choice 26.60% 24.72% 25.15% 22.64% None of these.

Bella Brands operates with two divisions, Aftershave and Deodorant. The Aftershave Division produces a chemical that the Deodorant Division also uses. The Aftershave Division also sells this chemical to other firms for $27 per ounce. The cost information for the Aftershave Division is as follows: Variable costs per ounce $ 6.00 Fixed costs per ounce $ 15.00 Monthly production capacity 30,000 ounces If the Aftershave Division is operating at full capacity and can sell all of the chemical that it can produce, what is the minimum transfer price that the Aftershave Division will accept? Multiple Choice None of the choices is correct. $6.00 per ounce $21.00 per ounce $15.00 per ounce $27.00 per ounce

Chapter 14 Solutions

Horngren's Accounting (11th Edition)

Ch. 14 - Prob. 1QC Ch. 14 - Daniels's bonds payable carry a stated interest...Ch. 14 - Prob. 3QC Ch. 14 - Prob. 4QC Ch. 14 - Prob. 5QC Ch. 14 - Prob. 6QC Ch. 14 - Prob. 7QC Ch. 14 - Prob. 8QC Ch. 14 - Prob. 9AQC Ch. 14 - 10B Hicks Corporation issued S500.000 of 5%,...

Ch. 14 - Prob. 1RQ Ch. 14 - Prob. 2RQ Ch. 14 - Prob. 3RQ Ch. 14 - Prob. 4RQ Ch. 14 - Prob. 5RQ Ch. 14 - Prob. 6RQ Ch. 14 - Prob. 7RQ Ch. 14 - Prob. 8RQ Ch. 14 - Prob. 9RQ Ch. 14 - Prob. 10RQ Ch. 14 - Prob. 11RQ Ch. 14 - Prob. 12RQ Ch. 14 - 13. What type of account is Premium on Bonds...Ch. 14 - Prob. 14RQ Ch. 14 - Prob. 15RQ Ch. 14 - Prob. 16RQ Ch. 14 - What does the debt to equity ratio show, and how...Ch. 14 - Prob. 18ARQ Ch. 14 - Prob. 19ARQ Ch. 14 - Prob. 20ARQ Ch. 14 - Prob. 21BRQ Ch. 14 - Prob. S14.1SE Ch. 14 - Prob. S14.2SE Ch. 14 - Prob. S14.3SE Ch. 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. S14.12SE Ch. 14 - Prob. S14A.13SE Ch. 14 - Determining the present value of bond at issuance...Ch. 14 - Using the effective-interest amortization method...Ch. 14 - Prob. S14B.16SE Ch. 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. E14.23E Ch. 14 - Journalizing bond issuance and interest payments...Ch. 14 - Retiring bonds payable before maturity Parkview...Ch. 14 - Prob. E14.26E Ch. 14 - Prob. E14.27E Ch. 14 - Prob. E14.28E Ch. 14 - Prob. E14.29E Ch. 14 - Prob. E14A.30E Ch. 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. P14.35APGA Ch. 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. P14.39BPGB Ch. 14 - Prob. P14.40BPGB Ch. 14 - Prob. P14.41BPGB Ch. 14 - Prob. P14.42BPGB Ch. 14 - Prob. P14.43BPGB Ch. 14 - Prob. P14AB.44BPGB Ch. 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. 14.1FC Ch. 14 - Prob. 14.1FSC

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.