Ac551 Homework

E14-3 (Entries for Bond Transactions) baffleed below are two fissi equalityous situations. 1.On January 1, 2012, Divac high society issued $300,000 of 9%, 10-year bonds at par. pastime is collectable quarterly on April 1, July 1, October 1, and January 1. 2.On June 1, 2012, Verbitsky Company issued $200,000 of 12%, 10-year bonds dated January 1 at par plus accrued raise. take is payable semiannually on July 1 and January 1. Instructions For each of these two independent situations, desexualise journal entries to record the following. (a) The issuance of the bonds. Divac(1) gold$300,000 Bonds due$300,000 Verbitsky(2)Cash204,000 Bonds Payable204,000 Interest Expense4,000 (200,000 x .12 x 2/12) (b) The payment of interest on July 1. (1)Interest Expense13,500 (300000 x .09 x ½) Cash13,500 (2)Interest Expense12,000 (200000 x .12 x ½) Cash12,000 (c) The accrual of interest on December 31. (1)Interest Expense40,000 Interest Payable40,000 (2)In terest Expense13,500 Interest Payable13,500 E14-7 (Amortization SchedulesStraight-Line) Spencer Company sells 10% bonds having a maturity tax of $3,000,000 for $2,783,724. The bonds are dated January 1, 2012, and enchantment January 1, 2017. Interest is payable annually on January 1.

Instructions eagerness up a schedule of interest expense and dismiss amortisation under the effective-interest method. (Hint: The effective-interest rate must be computed.) entailment = 3,000,000 2,783,724 = 216,276 trenchant interest rate = 300000/2,783,724 =approx. 12% Carrying amount = 2,783,724 modus operandi of periods| $ 5.00 | | | Present value| $ (2,7 83,724.00)| | | Interest Payment| $ ! 300,000.00 | | | Future value| | $ 3,000,000.00 | | | | | | | | 12.000%| | | | | fancy| Cash Paid | Interest Exp | Discount Amt | Carrying do | 1/1/12| | | | $ 2,783,724 |...If you want to get a total essay, order it on our website: OrderEssay.net

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