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In: Accounting
Presented below are three independent situations. (a) Sheridan Co. sold $2,030,000 of 10%, 10-year bonds at...
Presented below are three independent situations.
(a) Sheridan Co. sold $2,030,000 of 10%, 10-year bonds at 105 on January 1, 2017. The bonds were dated January 1, 2017, and pay interest on July 1 and January 1. If Sheridan uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2017, and December 31, 2017. (Round answer to 0 decimal places, e.g. 38,548.) Interest expense to be recorded $ ?
(b) Skysong Inc. issued $660,000 of 8%, 10-year bonds on June 30, 2017, for $577,750. This price provided a yield of 10% on the bonds. Interest is payable semiannually on December 31 and June 30. If Skysong uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2017. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.) Interest expense to be recorded $?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Presented below are two independent situations. Situation A: Annie Lennox Co. reports revenues of $200,000 and...
Presented below are two independent situations.
Situation A:
Annie Lennox Co. reports revenues of $200,000 and operating
expenses of $110,000 in its first year of operations, 2017.
Accounts receivable and accounts payable at year-end were $71,000
and $29,000, respectively. Assume that the accounts payable related
to operating expenses. (Ignore income taxes.)
Using the direct method, compute net cash provided (used) by
operating activities. (Show amounts that decrease cash
flow with either a - sign e.g. -15,000 or in parenthesis e.g....
Presented below are three independent situations. 1. Ivanhoe Stamp Company records stamp service revenue and provides...
Presented below are three independent situations.
1. Ivanhoe Stamp Company records stamp service
revenue and provides for the cost of redemptions in the year stamps
are sold to licensees. Ivanhoe’s past experience indicates that
only 80% of the stamps sold to licensees will be redeemed.
Ivanhoe’s liability for stamp redemptions was $13,180,300 at
December 31, 2019. Additional information for 2020 is as
follows.
Stamp service revenue from stamps sold to licensees
$10,060,100
Cost of redemptions (stamps sold prior to 1/1/20)...
) Windsor Co. sold $1,940,000 of 10%, 10-year bonds at 104 on January 1, 2017. The...
) Windsor Co. sold $1,940,000 of 10%, 10-year bonds at 104 on
January 1, 2017. The bonds were dated January 1, 2017, and pay
interest on July 1 and January 1. If Windsor uses the straight-line
method to amortize bond premium or discount, determine the amount
of interest expense to be reported on July 1, 2017, and December
31, 2017.
Sheridan Inc. issued $590,000 of 9%, 10-year bonds on June 30,
2017, for $553,237. This price provided a yield of...
Presented below are two independent situations. Answer the question at the end of each situation. 1. ...
Presented below are two independent situations. Answer the
question at the end of each situation.
1. During 2020, Salt-n-Pepa Inc. became involved in
a tax dispute with the IRS. Salt-n-Pepa Inc. believe it is probable
that the company will lose this dispute and have to pay the IRS
$900,000. How should Salt-n-Pepa Inc. report this contingency as of
December 31st, 2020 (fiscal year end)? If needed,
prepare the journal entry for Salt-n-Pepa Inc.
Debit
Credit
2. Etheridge Inc. had a...
(a) George Gershwin Co. sold $2,000,000 of 10%, 10-year bonds at 104 on January 1, 2020....
(a) George Gershwin Co. sold $2,000,000 of 10%, 10-year bonds at
104 on January 1, 2020. The bonds were dated January 1, 2020, and
pay interest on July 1 and January 1. If Gershwin uses the
straight-line method to amortize bond premium or discount,
determine the amount of interest expense to be reported on July 1,
2020, and December 31, 2020. (Round answer to 0 decimal places,
e.g. 38,548.) Interest expense to be recorded $ (b) Ron Kenoly Inc.
issued...
P10-Special The XYZ Co. sold $3,000,000, 8%, 10 year bonds on January 1, 2018. The bonds...
P10-Special
The XYZ Co. sold $3,000,000, 8%, 10 year bonds on January 1,
2018. The bonds were dated January 1, 2018, and pay interest on
January 1. The company uses the effective interest method to
amortize bond premiums and discounts. Financial statements are
prepared annually.
Instructions
a) Prepare the journal entries to record the issuance of the
bonds assuming they are sold at:
(1) 103 (i.e. 103% of
face) due to the market interest rate of 7%
(2)...
Presented below are two independent situations. 1. Gambino Cosmetics acquired 15% of the 120,500 shares of...
Presented below are two independent situations.
1. Gambino Cosmetics acquired 15% of the 120,500 shares of
common stock of Nevins Fashion at a total cost of $12 per share on
March 18, 2015. On June 30, Nevins declared and paid a $70,400
dividend. On December 31, Nevins reported net income of $118,200
for the year. At December 31, the market price of Nevins Fashion
was $14 per share. The stock is classified as
available-for-sale.
2. Kanza, Inc., obtained significant influence...
Presented below are two independent situations. 1. Gambino Cosmetics acquired 15% of the 120,500 shares of...
Presented below are two independent situations.
1. Gambino Cosmetics acquired 15% of the 120,500 shares of
common stock of Nevins Fashion at a total cost of $12 per share on
March 18, 2015. On June 30, Nevins declared and paid a $70,400
dividend. On December 31, Nevins reported net income of $118,200
for the year. At December 31, the market price of Nevins Fashion
was $14 per share. The stock is classified as
available-for-sale.
2. Kanza, Inc., obtained significant influence...
Wildhorse Co. sold $3,200,000, 9%, 10-year bonds on January 1, 2022. The bonds were dated January...
Wildhorse Co. sold $3,200,000, 9%, 10-year bonds on January 1,
2022. The bonds were dated January 1, 2022, and pay interest on
January 1. The company uses straight-line amortization on bond
premiums and discounts. Financial statements are prepared annually.
Prepare the journal entries to record interest expense for 2022
under both of the bond issuances assuming they sold at: (1) 101 and
(2) 98. Show the long-term liabilities balance sheet presentation
for issuance of the bonds sold at 101 at...
Saylor Co. sold $3,000,000, 8%, 10-year bonds on January 1, 2017. The bonds were dated January...
Saylor Co. sold $3,000,000, 8%, 10-year bonds on
January 1, 2017. The bonds were dated January 1, 2017, and pay
interest on January 1. The company uses straight-line amortization
on bond premiums and discounts. Financial statements are prepared
annually.
a. Prepare the journal entries to record the issuance of the bonds
assuming they sold at: (1) 103 and (2) 98.
b. Prepare an amortization table for issuance of the bonds sold at
103 for the first three interest payments.
c....
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