Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
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Chapter 9, Problem 9.41Q
To determine
To identify: The correct option related to recording of interest expense.
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Requirements-
Journalize the following transactions for Zillow. Include an explanation for each entry.
A. Issuance of the bonds payable at par on July 1, 2018
B. Accrual of interest expense on December 31,2018
C. Payments of cash interest on January 1, 2019
D. Payments of the bonds payable at maturity (give the date)
Record debuts first then credits. Select explanation on last line of journal entry table. See picture below.
Jj.87.
On September 30, 2012, Cullumber Company issued 10% bonds with a par value of $460,000 due in 20 years. They were issued at 98
and were callable at 105 at any date after September 30, 2017. Because Cullumber Company was able to obtain financing at lower
rates, it decided to call the entire issue on September 30, 2018, and to issue new bonds. New 9% bonds were sold in the amount of
$780,000 at 102; they mature in 20 years. Cullumber Company uses straight-line amortization. Interest payment dates are March 31
and September 30.
Chapter 9 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 9 - Brownlee Company issued 525,000, 8%, six-year...Ch. 9 - A bond with a face value of 250,000 and a quoted...Ch. 9 - Mission Furniture issued 500,000 in bonds payable...Ch. 9 - Bonds with an 8% stated interest rate were issued...Ch. 9 - Brimfest Corporation issued 2,400,000, 10-year, 6%...Ch. 9 - The Discount on Bonds Payable account a.is an...Ch. 9 - The discount on a bond payable becomes...Ch. 9 - The carrying value of Bonds Payable equals a.Bonds...Ch. 9 - Prob. 9QCCh. 9 - Prob. 10QC
Ch. 9 - Prob. 11QCCh. 9 - When a company retires bonds early, the gain or...Ch. 9 - Which type of lease will not increase a companys...Ch. 9 - Prob. 14QCCh. 9 - The debt ratio is calculated by dividing: a. total...Ch. 9 - Prob. 16QCCh. 9 - Prob. 17QCCh. 9 - Prob. 9.1ECCh. 9 - Prob. 9.1SCh. 9 - (Learning Objective 1: Determine bond prices at...Ch. 9 - (Learning Objective 1: Journalize basic bond...Ch. 9 - Prob. 9.4SCh. 9 - Prob. 9.5SCh. 9 - Prob. 9.6SCh. 9 - Prob. 9.7SCh. 9 - Prob. 9.8SCh. 9 - (Learning Objective 2: Account for bonds payable...Ch. 9 - Prob. 9.10SCh. 9 - LO 4,5 (Learning Objectives 4, 5: Deferred income...Ch. 9 - LO 5 (Learning Objective 5: Compute and evaluate...Ch. 9 - LO 5 (Learning Objective 5: Calculate the leverage...Ch. 9 - LO 6 (Learning Objective 6: Report liabilities)...Ch. 9 - (Learning Objective 1: Issue bonds payable...Ch. 9 - Prob. 9.16AECh. 9 - Prob. 9.17AECh. 9 - LO 2 (Learning Objective 2: Issue bonds payable...Ch. 9 - Prob. 9.19AECh. 9 - LO 4 (Learning Objective 4: Account for deferred...Ch. 9 - (Learning Objective 5: Evaluate debt-paying...Ch. 9 - LO 4, 5 (Learning Objectives 4, 5: Analyze current...Ch. 9 - Prob. 9.23AECh. 9 - (Learning Objective 1: Issue bonds payable...Ch. 9 - Prob. 9.25BECh. 9 - Prob. 9.26BECh. 9 - Prob. 9.27BECh. 9 - Prob. 9.28BECh. 9 - LO 4 (Learning Objective 4: Account for deferred...Ch. 9 - Prob. 9.30BECh. 9 - Prob. 9.31BECh. 9 - Prob. 9.32BECh. 9 - A bond with a face amount of 12,000 has a current...Ch. 9 - The carrying value on bonds equals Bends Payable...Ch. 9 - Prob. 9.35QCh. 9 - Prob. 9.36QCh. 9 - Prob. 9.37QCh. 9 - Prob. 9.38QCh. 9 - Prob. 9.39QCh. 9 - Prob. 9.40QCh. 9 - Prob. 9.41QCh. 9 - Prob. 9.42QCh. 9 - Prob. 9.43QCh. 9 - Prob. 9.44QCh. 9 - Prob. 9.45QCh. 9 - Prob. 9.46QCh. 9 - Prob. 9.47QCh. 9 - Prob. 9.48QCh. 9 - Prob. 9.49QCh. 9 - Prob. 9.50APCh. 9 - (Learning Objectives 1, 6: Issue bonds at a...Ch. 9 - Prob. 9.52APCh. 9 - Prob. 9.53APCh. 9 - (Learning Objectives 2, 3, 6: Issue convertible...Ch. 9 - Prob. 9.55APCh. 9 - Prob. 9.56BPCh. 9 - Prob. 9.57BPCh. 9 - Prob. 9.58BPCh. 9 - Prob. 9.59BPCh. 9 - (Learning Objectives 2, 3, 6: Issue convertible...Ch. 9 - (Learning Objectives 4, 5, 6: Report liabilities...Ch. 9 - Prob. 9.62CEPCh. 9 - Prob. 9.63CEPCh. 9 - Prob. 9.64SCCh. 9 - (Learning Objective 5: Explore an actual...Ch. 9 - Prob. 1FF
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- On September 1, 2019, a company borrowed cash and signed a 1-year,interest-bearing note on which both the principal and interest arepayable on September 1, 2021. How will the note payable and the relatedinterest be classified in the December 31, 2019, balance sheet? Note Payable Accrued Interest a. Current liabilityb. Noncurrent liabilityc. Current liabilityd. Noncurrent liability Noncurrent liabilityCurrent liabilityCurrent liabilityNo entryarrow_forwardBlossom Company sold $3,300,000, 6%, 10-year bonds on January 1, 2022. The bonds were dated January 1, 2022 and pay interest annually on January 1. Blossom Company uses the straight-line method to amortize bond premium or discount. (a)arrow_forwardCullumber Electric sold €3,950,000, 12%, 10-year bonds on January 1, 2020. The bonds were dated January 1 and pay interest annually on January 1. Cullumber Electric uses the straight-line method to amortize bond premium or discount. The bonds were sold at 101. Prepare the journal entry to record the issuance of the bonds on January 1, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Jan. 1, 2020 Prepare a bond premium amortization schedule for the first 4 interest periods. Debit Credit (B) Annual Interest Periods (A) Interest to Be Paid (10%* €3,00,000) (C) Interest Expense to Be (D) Recorded (A)-(C) Premium Amortization (€120,000*10%) Bond Carrying Val Issue date 1 300000 3950 € 2 300000 3950 300000 3950 300000 3950arrow_forward
- On October 1, 2020, an entity borrowed cash and signed a three-year interest bearing note on which both the principal and interest are payable on October 1, 2023. On December 31, 2021, accrued interest payable should A. not be reported as a liabilityB. be reported as current liabilityC. be reported as noncurrent liabilityD. be reported as part of noncurrent note payablearrow_forwardThe following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year: Required: 1. Journalize the entries to record the transactions. Round all amounts to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles. 2. Indicate the amount of the interest expense in (a) 20Y1 and (b) 20Y2. 3. Determine the carrying amount of the bonds as of December 31, 20Y2.arrow_forwardWhich of the following would most likely be classified as a current liability? Bonds payable Accounts payable O Mortgage payable O Three-year notes payablearrow_forward
- Prepare the entry to record the retirement of half the bonds still outstanding on January 1, 2022 for a cash payment of $1,220,000. Assume the accrued interest was paid. (Credit account tities are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts) Account Titles and Explanation Date Jan. 1, 2022 Debit Creditarrow_forwardwhat's the difference between retirement of bond and repayment to their bond holder( assume the transaction occur at due date for both cases). How journal entry it is?arrow_forward1. What should be reported as total current liabilities? 2. What amount should be reported as total noncurrent liabilities?arrow_forward
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