ACCT 211 Week 7 Chapter 10 Problem

ACCT 211 Week 7 Chapter 10 Problem | Accounting Assignment Help | Liberty University 

Chapter 10 Problems

v  Question 1

Hartford Research issues bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds have a $22,000 par value and an annual contract rate of 12%, and they mature in 10 years. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided. Round all table values to 4 decimal places, and use the rounded table values in calculations.)

 
Required:

Consider each of the following three separate situations.
 

1. The market rate at the date of issuance is 10%.
(a) Complete the below table to determine the bonds' issue price on January 1, 2017.
(b) Prepare the journal entry to record their issuance.
2. The market rate at the date of issuance is 12%.
(a) Complete the below table to determine the bonds' issue price on January 1, 2017.
(b) Prepare the journal entry to record their issuance.
3. The market rate at the date of issuance is 14%.
(a) Complete the below table to determine the bonds' issue price on January 1, 2017.
(b) Prepare the journal entry to record their issuance.
 

Complete this question by entering your answers in the tabs below.

Required 1A

Complete the below table to determine the bonds' issue price on January 1, 2017, if the market rate at the date of issuance is 10%.

Required 1B

Prepare the journal entry to record their issuance, if the market rate at the date of issuance is 10%.

Required 2A

Complete the below table to determine the bonds' issue price on January 1, 2017, if the market rate at the date of issuance is 12%.

Required 2B

Prepare the journal entry to record their issuance, if the market rate at the date of issuance is 12%.

Required 3A

Complete the below table to determine the bonds' issue price on January 1, 2017, if the market rate at the date of issuance is 14%.

Required 3B

Prepare the journal entry to record their issuance, if the market rate at the date of issuance is 14%.

v  Question 2

Hillside issues $1,400,000 of 5%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,209,757.

Required:

1. Prepare the January 1, 2017, journal entry to record the bonds’ issuance.
2(a) For each semiannual period, complete the table below to calculate the cash payment.
2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization.
2(c) For each semiannual period, complete the table below to calculate the bond interest expense.
3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
4. Prepare the first two years of an amortization table using the straight-line method.
5. Prepare the journal entries to record the first two interest payments.
 

Complete this question by entering your answers in the tabs below.

Req 1

Prepare the January 1, 2017, journal entry to record the bonds’ issuance.

Req 2A to 2C

For each semiannual period, complete the table below to calculate the cash payment, straight-line discount amortization and bond interest expense.

Req 3

Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.

Total bond interest expense over life of bonds:

Req 4

Prepare the first two years of an amortization table using the straight-line method.

Req 5

Prepare the journal entries to record the first two interest payments.

v  Question 3

Legacy issues $690,000 of 7.0%, four-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. They are issued at $623,078 and their market rate is 10% at the issue date.

Required:

1. Prepare the January 1, 2017, journal entry to record the bonds' issuance.

v  Question 4

Legacy issues $690,000 of 7.0%, four-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. They are issued at $623,078 and their market rate is 10% at the issue date.

2. Determine the total bond interest expense to be recognized over the bonds' life.
 

v  Question 5

Legacy issues $690,000 of 7.0%, four-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. They are issued at $623,078 and their market rate is 10% at the issue date.

3. Prepare a straight-line amortization table for the bonds' first two years.

v  Question 6

Legacy issues $690,000 of 7.0%, four-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. They are issued at $623,078 and their market rate is 10% at the issue date.

4. Prepare the journal entries to record the first two interest payments.

v  Question 7

On November 1, 2017, Norwood borrows $430,000 cash from a bank by signing a five-year installment note bearing 5% interest. The note requires equal payments of $99,319 each year on October 31. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)

 
Required:

1. Complete an amortization table for this installment note.
2. Prepare the journal entries in which Norwood records the following:
(a) Accrued interest as of December 31, 2017 (the end of its annual reporting period).
(b) The first annual payment on the note.

Complete this question by entering your answers in the tabs below.

Req 1

Complete an amortization table for this installment note. (Round your intermediate calculations to the nearest dollar amount.)

Req 2A and 2B

Prepare the journal entries in which Norwood records for accrued interest as of December 31, 2017 (the end of its annual reporting period) and the first annual payment on the note.

v  Question 1

At the end of the current year, the following information is available for both Pulaski Company and Scott Company.
 

 
Required:

1. Compute the debt-to-equity ratios for both companies.

v  Question 9

Ike issues $110,000 of 9%, three-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. They are issued at $112,881. Their market rate is 8% at the issue date.

Required:

1. Prepare the January 1, 2017, journal entry to record the bonds' issuance.

v  Question 10

Ike issues $110,000 of 9%, three-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. They are issued at $112,881. Their market rate is 8% at the issue date.

2. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
 

v  Question 11

Ike issues $110,000 of 9%, three-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. They are issued at $112,881. Their market rate is 8% at the issue date.

3. Prepare an effective interest amortization table for the bonds' first two years.

v  Question 12

Ike issues $110,000 of 9%, three-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. They are issued at $112,881. Their market rate is 8% at the issue date.

4. Prepare the journal entries to record the first two interest payments.
 

v  Question 13

Ike issues $110,000 of 9%, three-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. They are issued at $112,881. Their market rate is 8% at the issue date.

5. Prepare the journal entry to record the bonds' retirement on January 1, 2019, at 98.
 

v  Question 14

Rogers Company signs a five-year capital lease with Packer Company for office equipment. The annual year-end lease payment is $19,000, and the interest rate is 9%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)

1.      Complete the below table to calculate the present value of Rogers’s five-year lease payments.

v  Question 15

Rogers Company signs a five-year capital lease with Packer Company for office equipment. The annual year-end lease payment is $19,000, and the interest rate is 9%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)

2. Prepare the journal entry to record Rogers’s capital lease at its inception.

v  Question 16

Rogers Company signs a five-year capital lease with Packer Company for office equipment. The annual year-end lease payment is $19,000, and the interest rate is 9%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)

2.      Complete a lease payment schedule for the five years of the lease with the following headings. Assume that the beginning balance of the lease liability is the present value of lease payments.
 

v  Question 17

Rogers Company signs a five-year capital lease with Packer Company for office equipment. The annual year-end lease payment is $19,000, and the interest rate is 9%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)

4. Use straight-line depreciation and prepare the journal entry to depreciate the leased asset at the end of year 1. Assume zero salvage value and a five-year life for the office equipment.