Recent Question

Prepare a schedule which shows the expected net income after taxes Ex. 1 Banks Company is considering two alternatives to finance its purchase of a new $4,000,000 office building. (a) Issue 400,000 ordinary shares at $10 per share. (b) Issue 8%, 10-year bonds at par ($4,000,000). Income before interest and taxes is expected to be $3,000,000. The company has a 30% tax rate and has 600,000 ordinary shares outstanding prior to the new ...

Other / Other 20 Apr 2016

Prepare the entry to record the sale of these bonds Ex. 1 Taylor Corporation issued $2 million, 10-year, 6% bonds on January 1, 2011. Instructions Prepare the entry to record the sale of these bonds , assuming they were issued at (a) 98. (b) 103. Ex. 2 On January 1, 2011, Lang Corporation issued $900,000, 8%, 10-year bonds at face value. Interest is payable semiannually on July 1 and January 1. Lang Corporation has a calendar ...

Other / Other 20 Apr 2016

Prepare a bond discount amortization schedule which shows the amortization a Ex. 1 Wenger Corporation is issuing €500,000 of 8%, 5-year bonds when potential bond investors want a return of 10%. Interest is payable semiannually. The present value of 1 factors are 4%, .67556 and 5%, .61391. The present value of an annuity factors are 4%, 8.1109 and 5%, 7.72173. Instructions Compute the market price (present value) of the bonds. ...

Other / Other 20 Apr 2016

Is it ethical for a company to have a secret system like the one described aS-A E 1 Megan Stone is discussing the advantages of the effective-interest method of bond amortization with her accounting staff. What do you think Megan is saying? S-A E 2 (Ethics) Hannah Company maintains two separate accounts payable computer systems. One is known to all the users, and is used to process payments to vendors. Employees enter the vendor cod ...

Other / Other 20 Apr 2016

The terms of a bond issue are set forth in a formal legal document called 1. Bonds that mature at a single specified future date are called _______________ bonds, whereas bonds that mature in installments are called ________________ bonds. 2. The terms of a bond issue are set forth in a formal legal document called a bond ________________. 3. Unsecured bonds that are issued against the general credit of the borrower are called ___ ...

Other / Other 20 Apr 2016

Prepare the entry in October for the receipt Ex. 1 Flores Company publishes a monthly sports magazine, Hunting Preview. Subscriptions to the magazine cost $20 per year. During October 2011, Flores sells 18,000 subscriptions beginning with the November issue. Flores prepares financial statements quarterly and recognizes subscription revenue earned at the end of the quarter. The company uses the accounts Unearned Subscriptions and Subscrip ...

Other / Other 20 Apr 2016

Journalize the payment of the bond interest Ex. 1 On January 1, Porter Corporation issued $600,000, 6%, 5-year bonds at face value. Interest is payable semiannually on July 1 and January 1. Instructions Prepare journal entries to record the (a) Issuance of the bonds. (b) Payment of interest on July 1, assuming no previous accrual of interest. (c) Accrual of interest on December 31. Ex. 2 The following section is taken from Brown ...

Other / Other 20 Apr 2016

If bonds have been issued at a discount, over the life of the bonds 1. Terrance Company issued $500,000 of 8%, 5-year bonds at 106. Assuming straight-line amortization and annual interest payments, how much bond interest expense is recorded on the next interest date? a. $40,000 b. $46,000 c. $34,000 d. $6,000 a 2. Garcia Company issued $600,000 of 8%, 5-year bonds at 106, with interest paid annually. Assuming straight-line amort ...

Other / Other 20 Apr 2016

A major disadvantage resulting from the use of bonds is that 1. From the standpoint of the issuing company, a disadvantage of using bonds as a means of long-term financing is that 2. If a corporation issued ¥3,000,000,000 in bonds which pay 10% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%? 3. Secured bonds are bonds that 4. A legal document which summarizes the rights and ...

Other / Other 20 Apr 2016

The present value of a bond is also known as its 1. Whitmore Corporation Issues a £1,200,000, 10%, 10-year mortgage on December 31, 2011. The terms call for semi-annual installment payments of £96,290.The entry to record the first installment payment will include 2. The adjusted trial balance for Beneteau Corporation at the end of the 2011 included the following accounts: 5-year Bonds Payable 8% €6,120,000 Bo ...

Other / Other 20 Apr 2016