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Explain why a company would decide to retire bonds before maturity S-A E 1 Bonds may be redeemed (retired) before maturity by the issuing corporation. Explain why a company would decide to retire bonds before maturity and the necessary steps to record the redemption. aS-A E 2 Kim Estes and Jeff Malone are discussing how the market price of a bond is determined. Kim believes that the market price of a bond is solely a function of th ...

Other / Other 20 Apr 2016

A measure of a company's liquidity 1. Match the items below by entering the appropriate code letter in the space provided. A. Serial bonds G. Straight-line method of amortization B. Debenture bonds H. Bonds C. Bond indenture I. Debt to total assets ratio D. Premium on bonds payable J. Current liability E. Discount on bonds payable K. Current ratio F. Effective-interest method of amortization L. Registered bonds _____ 1. A ...

Other / Other 20 Apr 2016

Prepare the journal entry to record the retirement of the bonds Ex. 1 Carpino Company issued €500,000 of bonds on January 1, 2011. Instructions (a) Prepare the journal entry to record the retirement of the bonds at maturity, assuming the bonds were issued at 100. (b) Prepare the journal entry to record the retirement of the bonds before maturity at 98. Assume the carrying value of the bonds was $505,000. Ex. 2 Wood Company ...

Other / Other 20 Apr 2016

Prepare all the journal entries that Morten Corporation would make related to this bond issue a Ex. 1 On June 30, 2011, Wayne, Inc. sold $3,000,000 (face value) of bonds. The bonds are dated June 30, 2011, pay interest semiannually on December 31 and June 30, and will mature on June 30, 2014. The following schedule was prepared by the accountant for 2011. Semi-Annual Interest to Interest Bond Interest Period be Paid Expense Am ...

Other / Other 20 Apr 2016

A current liability is a debt that can be expected to be paid within 1. A current liability is a debt that can be expected to be paid within ______________ year or the ______________, whichever is longer. 2. Liabilities are classified on the statement of financial position as being _______________ liabilities or ______________ liabilities. 3. Obligations in written form are called ______________ and usually require the borrowe ...

Other / Other 20 Apr 2016

Prepare journal entries for each of the transactions Ex. 1 On March 1, Jordan Company borrows $120,000 from Ottawa State Bank by signing a 6-month, 8%, interest-bearing note. Instructions Prepare the necessary entries below associated with the note payable on the books of Jordan Company. (a) Prepare the entry on March 1 when the note was issued. (b) Prepare any adjusting entries necessary on June 30 in order to prepare the semi-annua ...

Other / Other 20 Apr 2016

Stover Corporation reports the following amounts Ex. 1 The adjusted trial balance for Payne Corporation at the end of the current year contained the following accounts: Bonds payable, 10% $560,000 Bond interest payable 20,000 Lease liability 60,000 Mortgage notes payable, 9%, due 2013 80,000 Accounts payable 120,000 Instructions (a) Prepare the non-current liabilities section of the statement of financial position. (b) In ...

Other / Other 20 Apr 2016

Prepare all journal entries made in 2010 related to the bond issue a Ex. 1 Vance Company issued $600,000, 10%, 20-year bonds on January 1, 2010, at 104. Interest is payable semiannually on July 1 and January 1. Vance uses the straight-line method of amortization and has a calendar year end. Instructions Prepare all journal entries made in 2010 related to the bond issue. a Ex. 2 Jantz Company issued €500,000, 11%, 10-year bon ...

Other / Other 20 Apr 2016

Prepare the entries to record the issuance of the bonds aBE 1 On January 1, 2011, Fabian Enterprises issued 9%, 10-year bonds with a face amount of $900,000 at 96. Interest is payable semiannually on June 30 and December 31. The bonds were issued for an effective interest rate of 10%. Instructions Prepare the entries to record the issuance of the bonds and the first semiannual interest payment assuming that the company uses effective- ...

Other / Other 20 Apr 2016

Explain how such a result could occur S-A E 1 (Communication) Susan Kline works for Trend Press, a fairly large book publishing firm. Her best friend and rival, Lisa, works for Silver Books, a smaller publisher. Both companies issue $100,000 in bonds on July 1. Trend's bonds were issued at a discount, while Silver's were issued at a premium. Lisa sent Susan a fax the next day. She told Susan that it was obvious who the better publisher ...

Other / Other 20 Apr 2016