Chapter 7A, Problem 6PB

1.

To determine

Calculate the proceeds for the bond issue and the manner it would issuing the bonds affect the financial statements for G’s Gadgets.

2.

To determine

Prepare an amortization schedule for the first three years of the life of the bonds.

3.

To determine

Identify the amount of interest expenses related to issued bonds that G’s Gadgets would be reported on its income statement for the year ended December 31, 2015.

4.

To determine

Calculate the interest expense using the straight line method of amortization for the year ended December 31, 2015, and compare with the amount of effective interest method and select the best method for A’s Imports.