acct 212 chapter 14 homework 1

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acct 212 chapter 14 homework 1    rest questionr  are in attached file

.1

award:
0 out of
3.00 points

Problem 14-1A Computing bond price and recording issuance L.O. P1, P2,
P3

Stowers
Research issues bonds dated January 1, 2011, that pay interest semiannually
on June 30 and December 31. The bonds have a $32,000 par value and an annual
contract rate of 12%, and they mature in 10 years.

Required:

Consider
each of the following three separate situations. (Use .mhhe.com/connect/0078110874/Images/tableb.1.jpg”>Table B.1, .mhhe.com/connect/0078110874/Images/tableb.3.jpg”>Table B.3)

1.

The
market rate at the date of issuance is 10%.

(a)

Determine
the bonds’ issue price on January 1, 2011. (Round
“PV Factors” to 4 decimal places, intermediate calculations and
final answer to the nearest dollar amount. Omit the “$” sign in
your response.)

(b)

Prepare
the journal entry to record their issuance. (Round
“PV Factors” to 4 decimal places, intermediate calculations and
final answers to the nearest dollar amount. Omit the “$” sign in
your response.)

2.

The
market rate at the date of issuance is 12%.

(a)

Determine
the bonds’ issue price on January 1, 2011. (Round
“PV Factors” to 4 decimal places, intermediate calculations and
final answer to the nearest dollar amount. Omit the “$” sign in
your response.)

Issue
price

$ n/r .gif” alt=”incorrect”>

(b)

Prepare
the journal entry to record their issuance. (Round
“PV Factors” to 4 decimal places, intermediate calculations and
final answers to the nearest dollar amount. Omit the “$” sign in
your response.)

3.

The
market rate at the date of issuance is 14%.

(a)

Determine
the bonds’ issue price on January 1, 2011. (Round
“PV Factors” to 4 decimal places, intermediate calculations and
final answer to the nearest dollar amount. Omit the “$” sign in
your response.)

Issue
price

$ n/r .gif” alt=”incorrect”>

(b)

Prepare
the journal entry to record their issuance. (Round
“PV Factors” to 4 decimal places, intermediate calculations and
final answers to the nearest dollar amount. Omit the “$” sign in
your response.)

rev: 03_02_2012

eBook Links (3)

Worksheet

Difficulty: Medium

Learning Objective: 14-P2 Compute and record amortization of bond
discount.

Problem 14-1A Computing bond price and recording issuance L.O. P1, P2,
P3

Learning Objective: 14-P1 Prepare entries to record bond issuance and interest
expense.

Learning Objective: 14-P3 Compute and record amortization of bond
premium.

.

award:
1.10 out of
5.00 points

Problem 14-2A Straight-line amortization of bond discount L.O. P1, P2

Heathrow
issues $3,000,000 of 6%, 15-year bonds dated January 1, 2011, that pay
interest semiannually on June 30 and December 31. The bonds are issued at a
price of $2,592,334.

Required:

1.

Prepare
the January 1, 2011, journal entry to record the bonds’ issuance. (Omit the “$” sign in your response.)

2(a)

For
each semiannual period, compute the cash payment. (Do not round your intermediate calculations. Omit the
“$” sign in your response.)

2(b)

For
each semiannual period, compute the the straight-line discount amortization. (Round your answer to the nearest dollar amount. Omit the “$” sign in your response.)

Amount
of discount amortization

$ n/r .gif” alt=”incorrect”>

2(c)

For
each semiannual period, compute the bond interest expense. (Round your intermediate calculations and final answer to
the nearest dollar amount. Omit the “$” sign in your response.)

Bond
interest expense

$ n/r .gif” alt=”incorrect”>

3.

Determine
the total bond interest expense to be recognized over the bonds’ life. (Do not round semi-annual interest rate. Round intermediate
calculations to the nearest dollar. Omit the “$” sign in your
response.)

Total
bond interest expense

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4.

Prepare
the first two years of an amortization table using the straight-line method. (Round your intermediate calculations and
final answers to the nearest dollar amount. Omit the “$” sign
in your response.)

5.

Prepare
the journal entries to record the first two interest payments. (Round your intermediate calculations and
final answers to the nearest dollar amount. Omit the “$” sign
in your response.)

3.

award:
0 out of
5.00 points

Problem 14-3A Straight-line amortization of bond premium L.O. P1, P3

Heathrow
issues $1,600,000 of 9%, 15-year bonds dated January 1, 2011, that pay
interest semiannually on June 30 and December 31. The bonds are issued at a
price of $1,958,394.

Required:

1.

Prepare
the January 1, 2011, journal entry to record the bonds’ issuance. (Omit the “$” sign in your response.)

Date

General Journal

Debit

Credit

Jan. 1

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2(a)

For
each semiannual period, compute the cash payment. (Do not round your intermediate calculations. Omit the
“$” sign in your response.)

Cash
payment

$ n/r .gif” alt=”incorrect”>

2(b)

For
each semiannual period, compute the the straight-line premium amortization. (Round your final answer to the nearest dollar amount. Omit the “$” sign in your response.)

Amount
of premium amortized

$ n/r .gif” alt=”incorrect”>

2(c)

For
each semiannual period, compute the the bond interest expense. (Round your intermediate calculations and final answer to
the nearest dollar amount. Omit the “$” sign in your response.)

Bond
interest expense

$ n/r .gif” alt=”incorrect”>

3.

Determine
the total bond interest expense to be recognized over the bonds’ life. (Do not round your intermediate calculations. Omit the
“$” sign in your response.)

Total
bond interest expense

$ n/r .gif” alt=”incorrect”>

4.

Prepare
the first two years of an amortization table using the straight-line method. (Round your intermediate calculations and final answers to
the nearest dollar amount. Omit the “$” sign in your response.)

5.

Prepare
the journal entries to record the first two interest payments. (Round your intermediate calculations and final answers to
the nearest dollar amount. Omit the “$” sign in your response.)

eBook Links (2)

Worksheet

Difficulty: Medium

Learning Objective: 14-P3 Compute and record amortization of bond
premium.

Problem 14-3A Straight-line amortization of bond premium L.O. P1, P3

Learning Objective: 14-P1 Prepare entries to record bond issuance and
interest expense.

4.

award:
0 out of
5.00 points

Problem 14-5AB Effective interest amortization of bond premium;
computing bond price L.O. P1, P3

Saturn
issues 8.5%, five-year bonds dated January 1, 2011, with a $490,000 par
value. The bonds pay interest on June 30 and December 31 and are issued at a
price of $542,250. The annual market rate is 6% on the issue date.

1.

Compute
the total bond interest expense over the bonds’ life. (Do not round
intermediate calculations. Omit the “$” sign in your response.)

Total
bond interest expense

$ n/r .gif” alt=”incorrect”>

2.

Prepare
an effective interest amortization table for the bonds’ life. (Make
sure that the unamortized premium equals to ‘0’ and the Carrying value equals
to face value of the bond in the last period. Leave no cells blank – be
certain to enter “0” wherever required. Bond interest expense in
the last period should be calculated as Cash interest paid (?) Premium
amortized. Round your answers to the nearest dollar amount. Omit the
“$” sign in your response.)

Semiannual Interest
Period-End

(A)
Cash Interest
Paid

(B)
Bond Interest
Expense

(C)
Premium
Amortization

(D)
Unamortized
Premium

(E)
Carrying
Value

1/01/2011

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$ n/r .gif” alt=”incorrect”>

6/30/2011

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$ n/r .gif” alt=”incorrect”>

$ n/r .gif” alt=”incorrect”>

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12/31/2011

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6/30/2012

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12/31/2012

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6/30/2013

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12/31/2013

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6/30/2014

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12/31/2014

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6/30/2015

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12/31/2015

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Total

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3.

Prepare
the journal entries to record the first two interest payments. (Round
your answers to nearest dollar amount. Omit the “$” sign in your
response.)

Date

General Journal

Debit

Credit

June 30, 2011

n/r .gif” alt=”incorrect”>

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n/r .gif” alt=”incorrect”>

.gif” alt=”incorrect”>

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Dec. 31, 2011

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4.

Use the
market rate at issuance to compute the present value of the remaining cash
flows for these bonds as of December 31, 2013. (Use .mhhe.com/connect/0078110874/Images/tableb.1.jpg”>Table B.1, .mhhe.com/connect/0078110874/Images/tableb.3.jpg”>Table B.3) (Round
“PV Factors” to 4 decimal places, intermediate and
final answers to the nearest dollar amount. Omit the “$” sign
in your response.)

Present
value

$ n/r .gif” alt=”incorrect”>

rev: 08_13_2011

eBook Links (2)

Worksheet

Difficulty: Hard

Learning Objective: 14-P3 Compute and record amortization of bond
premium.

Problem 14-5AB Effective interest amortization of bond premium;
computing bond price L.O. P1, P3

Learning Objective: 14-P1 Prepare entries to record bond issuance and
interest expense.

Problem 14-6A Straight-line amortization of bond discount L.O. P1, P2

[The following information applies to
the questions displayed below.]

Patton
issues $590,000 of 7.5%, four-year bonds dated January 1, 2011, that pay
interest semiannually on June 30 and December 31. They are issued at $542,310
and their market rate is 10% at the issue date.

Section Break

Difficulty: Hard

Learning Objective: 14-P2 Compute and record amortization of bond
discount.

Problem 14-6A Straight-line amortization of bond discount L.O. P1, P2

Learning Objective: 14-P1 Prepare entries to record bond issuance and
interest expense.

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