ACCOUNTING PRINCIPLES 122 5/16 >C<
ACCOUNTING PRINCIPLES 122 5/16 >C<
17th Edition
ISBN: 9781323461471
Author: Horngren
Publisher: PEARSON C
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Chapter 15, Problem E15.9E
To determine

Concept introduction: Bond refers to a financial security which is issued by a business entity for raising funds for long-term. Bond generates return for the investors on a specified date and this return can be variable or fixed.

Requirement 1;

To prepare: Journal entries for the transactions of 2016.

Main solution:

Date Accounts Title& Explanation Debit Credit
Jan. 2, 2016 Long-term Investment –Held-to-Maturity $800000  
  Cash   $800000
  (For recording purchase of bond)    
       
June.30, 2016 Cash $16000  
  Interest Revenue   $16000
  (For recording interest on bond)    
       
Dec.31, 2016 Cash $16000  
  Interest Revenue   $16000
  (For recording interest on bond)    

To determine

Requirement 2;

To calculate: Amount of interest received each year from CocoCorp.

Main solution:

Amount of interest received each year from CocoCorp = $32000

To determine

Requirement 3;

To calculate: Amount of interest revenue recognized during 2016.

Main solution:

Amount of interest revenue recognized during 2016 = $32000

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Financial data for Hunger Games Company for last year appear below: Hunger Games Company Statements of Financial Position Beginning Balance Ending Balance Assets: Cash $120,700 $220,000 Accounts receivable 225,000 475,000 Inventory 317,000 390,000 Plant and equipment (net) 940,000 860,000 Investment in Katniss Company 100,000 98,000 Land (undeveloped) 198,000 65,000 Total assets $1,900,700 $2,108,000 Liabilities and owners' equity: Accounts payable $178,700 $8,000 Long-term debt 512,000 600,000 Owners' equity 1,210,000 1,500,000 Total liabilities and owners' $1,900,700 $2,108,000 equity
Financial data for Hunger Games Company for last year appear below: Hunger Games Company Statements of Financial Position Beginning Balance Ending Balance Assets: Cash $120,700 $220,000 Accounts receivable 225,000 475,000 Inventory 317,000 390,000 Plant and equipment (net) 940,000 860,000 Investment in Katniss Company 100,000 98,000 Land (undeveloped) 198,000 65,000 Total assets $1,900,700 $2,108,000 Liabilities and owners' equity: Accounts payable $178,700 $8,000 Long-term debt 512,000 600,000 Owners' equity 1,210,000 1,500,000 Total liabilities and owners' $1,900,700 $2,108,000 equity
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Financial Accounting - Long-term Liabilities - Bonds; Author: Finance & Accounting Videos by Prof Coram;https://www.youtube.com/watch?v=_1fwsJIGMos;License: Standard Youtube License