AC 302 CHAPTER 14 PROBLEM QUESTION 5

AC 302 CHAPTER 14 PROBLEM QUESTION 5
Name				Date	
Instructor			Course	
Intermediate Accounting 14th Edition by Kieso Weygandt and Warfield						
Primer on Using Excel in Accounting by Rex A Schildhouse						
						
"P14-5 (Comprehensive Bond Problem)
(Note: Calculations with financial calculators or tables might result in slightly different values due
          to rounding.)"						
						
						
"Instructions: (Round to the nearest dollar.)
In each of the following independent cases the company closes its books on December 31.
For the two cases prepare all of the relevant journal entries from the time of sale until the date indicated. Use the effective interest method for discount and premium amortization (construct amortization tables where applicable). Amortize premium or discount on interest dates and at year-end. (Assume that no reversing entries were made.)"						
						
						
						
						
						
						
1. Sanford Co. sells		$500,000 	of	10%	bonds on March 1, 2012. The 	
bonds pay interest on September 1 and March 1. The due date of the bonds is September 1, 2015. 						
The bonds yield		12%	Give the entries through December 31, 2013.			
						
Mar 1, 12	Account Title				Amount	
	Account Title				Amount	
	Account Title					Amount
						
	Maturity value of bonds payable				Amount	
	Present value of $250,000 due in 7 periods at 6%				Formula	
	Present value of interest payable semiannually				Formula	
	Proceeds from sale of bonds				Formula	
	Discount on bonds payable				Formula	
						
Sep 1, 12	Account Title				Amount	
	Account Title					Amount
	Account Title					Amount
						
Dec 31, 12	Account Title				Amount	
	Account Title					Amount
	Account Title					Amount
	Note: Amortization table is semi-annual, interest rate is stated as annual value.					
						
Mar 1, 13	Account Title				Amount	
	Account Title				Amount	
	Account Title					Amount
	Account Title					Amount
						
Sep 1, 13	Account Title				Amount	
	Account Title					Amount
	Account Title					Amount
						
Dec 31, 13	Account Title				Amount	
	Account Title					Amount
	Account Title					Amount
						
	Schedule of Bond Discount Amortization					
	Effective Interest Method					
	10% Bonds Sold to Yield 12%					
	Date	"Cash
Paid"	"Interest
Expense"	"Bond
Discount"	"Carrying
Value
of Bonds"	
	Mar 1, 12				Amount	
	Sep 1, 12	Formula	Formula	Formula	Formula	
	Mar 1, 13	Formula	Formula	Formula	Formula	
	Sep 1, 13	Formula	Formula	Formula	Formula	
	Mar 1, 14	Formula	Formula	Formula	Formula	
	Sep 1, 14	Formula	Formula	Formula	Formula	
	Mar 1, 15	Formula	Formula	Formula	Formula	
	Sep 1, 15	Formula	Formula	Formula	Formula	
						
2. Titania Co. sells		$400,000 	of	12%	bonds on June 1, 2012. The	
bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2016. The bonds						
yield	10%	On October 1, 2013, Titania buys back				$120,000 
worth of the bonds for		$126,000 	(includes accrued interest). Give the entries through			
December 31, 2014.						
Jun 1, 12	Account title				Amount	
	Account title					Amount
	Account title					Amount
						
	Maturity value of bonds payable				Amount	
	Present value of $250,000 due in 7 periods at 6%				Formula	
	Present value of interest payable semiannually				Formula	
	Proceeds from sale of bonds				Formula	
	Premium on bonds payable				Formula	
						
Dec 1, 12	Account Title				Amount	
	Account Title				Amount	
	Account Title					Amount
	Note: Amortization table is semi-annual, interest rate is stated as annual value.					
						
Dec 31, 12	Account title				Amount	
	Account title				Amount	
	Account title					Amount
						
Jun 1, 13	Account Title				Amount	
	Account Title				Amount	
	Account Title				Amount	
	Account Title					Amount
						
Oct 1, 13	Account title				Amount	
	Account title				Amount	
	Account title					Amount
						
Oct 1, 13	Account title				Amount	
	Account title				Amount	
	Account title					Amount
	Account title					Amount
						
	Net carrying amount of bonds redeemed - Par value				Amount	
	Unamortized premium				Amount	
					Formula	
	Reacquisition price				Amount	
	Gain on redemption				Formula	
						
Dec 1, 13	Account title				Amount	
	Account title				Amount	
	Account title					Amount
						
Dec 31, 13	Account title				Amount	
	Account title				Amount	
	Account title					Amount
						
Jun 1, 14	Account title				Amount	
	Account title				Amount	
	Account title				Amount	
	Account title					Amount
						
Dec 1, 14	Account				Amount	
	Account				Amount	
	Account					Amount
						
	Schedule of Bond Discount Amortization					
	Effective Interest Method					
	12% Bonds Sold to Yield 10%					
	Date	"Cash
Paid"	"Interest
Expense"	"Bond
Premium"	"Carrying
Value
of Bonds"	
	Jun 1, 12				Amount	
	Dec 1, 12	Formula	Formula	Formula	Formula	
	Jun 1, 13	Formula	Formula	Formula	Formula	
	Dec 1, 13	Formula	Formula	Formula	Formula	
	Jun 1, 14	Formula	Formula	Formula	Formula	
	Dec 1, 14	Formula	Formula	Formula	Formula	
	Jun 1, 15	Formula	Formula	Formula	Formula	
	Dec 1, 15	Formula	Formula	Formula	Formula	
	Jun 1, 16	Formula	Formula	Formula	Formula