On January 1, 2020, Tamarisk Company purchased $350,000, 8% bonds of Aguirre Co. for $322,973. The bonds were purchased to yield 10% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2025. Tamarisk Company uses the effective-interest method to amortize discount or premium. On January 1, 2022, TamariskCompany sold the bonds for $324,733 after receiving interest to meet its liquidity needs.
Prepare the journal entry to record the purchase of bonds on January 1. Assume that the bonds are classified as available-for-sale. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
| Jan. 1, 2020 | |||
eTextbook and Media
List of Accounts
Prepare the amortization schedule for the bonds. (Round answers to 0 decimal places, e.g. 1,250.)
|
Schedule of Interest Revenue and Bond Discount |
||||||||
|
|
Interest Receivable |
|
Bond |
Carrying |
||||
| 1/1/20 |
$ |
$ |
$ |
$ |
||||
| 7/1/20 | ||||||||
| 1/1/21 | ||||||||
| 7/1/21 | ||||||||
| 1/1/22 | ||||||||
| 7/1/22 | ||||||||
| 1/1/23 | ||||||||
| 7/1/23 | ||||||||
| 1/1/24 | ||||||||
| 7/1/24 | ||||||||
| 1/1/25 | ||||||||
| Total |
$ |
$ |
$ |
|||||
eTextbook and Media
List of Accounts
| (c) | Prepare the journal entries to record the semiannual interest on (1) July 1, 2020, and (2) December 31, 2020. | |
| (d) | If the fair value of Aguirre bonds is $326,733 on December 31, 2021, prepare the necessary adjusting entry. (Assume the fair value adjustment balance on December 31, 2020, is a debit of $3,212.) | |
| (e) | Prepare the journal entry to record the sale of the bonds on January 1, 2022. |
(Round answers to 0 decimal places, e.g. 2,500. Credit
account titles are automatically indented when amount is entered.
Do not indent manually. If no entry is required, select "No Entry"
for the account titles and enter 0 for the
amounts.)
|
No. |
Date |
Account Titles and Explanation |
Debit |
Credit |
||
|
(c) |
(1) |
|
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| (2) |
|
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|
(d) |
July 1, 2020Dec. 31, 2020Dec. 31, 2021Jan. 1, 2022 |
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|
(e) |
|
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In: Accounting
The following transactions occurred during 2020 (the company uses a perpetual inventory system with FIFO):
1) Jan 4 Stockholders invested an additional $10,000 cash in the business in exchange for common stock
2) Jan 4 Purchased 20 rabbits at $50 each on account from Jelly Bean Farms.
3) Jan 4 Established a $200 petty change fund
4) Jan 5 Sold 6 rabbits for $200 each to Mr. Karrot, terms 2/10, n/30.
5) Jan 6 Sold 12 rabbits at $200 each for cash
6) Jan 8 Paid wages of $240
7) Jan 9 Mr. Karrot returned one rabbit because they originally ordered only 5.
8) Jan 12 Purchased equipment on account for $2,000
9) Jan 14 Received payment in full from Mr. Karrot
10) Jan 15 Purchased 10 rabbits at $52 each on account from Easter Industries, terms 1/10, n/30.
11) Jan 15 Paid utility bill of $120
12) Jan 16 Returned 2 rabbits to Easter Industries because they were defective.
13) Jan 17 Sold 8 rabbits for $245 each for cash
14) Jan 18 Paid tax bill from 2019.
15) Jan 18 Performed the service of rabbit grooming ($800 worth); we received the cash in 2019
16) Jan 19 Paid Accounts Payable in full from 2019
17) Jan 20 Received $2,200 cash from customers paying on their accounts
18) Jan 21 Received a bill from the local radio station for advertising in the amount of $400
19) Jan 22 Purchased 20 rabbits for $55 each on account from Eggs & Chicks Company; terms 2/5, n/30
20) Jan 23 Paid freight costs from Eggs & Chicks Company of $10.
21) Jan 25 Sold 10 rabbits to Bunny Tail Corporation for $260 each on account; terms 3/10, n/30
22) Jan 26 Received payment in full from Bunny Tail Corporation
23) Jan 27 Sold 10 rabbits to customers on credit for $260 each.
24) Jan 28 Paid Eggs & Chicks Company for the purchase on Jan 22
25) Jan 29 Petty cash was replenished and had the following receipts: gas receipt for $20, postage stamps for $39, Office Depot receipt for $16, miscellaneous receipt for $30, travel receipts for $40
26) Jan 30 Performed a physical inventory count and count only 1 rabbit on hand.
27) Jan 30 Bank statement arrives today and there is a $20 bank service charge as well as a $120 NSF check.
28) Jan 31 One month’s prepaid insurance needs to be expensed for January ($1,200 is for the whole year)
29) Jan 31 Depreciate one month’s worth of the building and equipment (Using straight line method; building has a useful life of 20 years, equipment has a useful life of 5 years and no salvage value)
30) Jan 31 The estimated bad debt expense under the percentage of sales basis is $120.
31) Jan 31 Paid dividends of $500
What would the journal entries be for Jan 16,18,19,30 and 31st??? Numbers 12, 14, 15, 16, 26, 27, 29, 30?
In: Accounting
The shareholders’ equity of Core Technologies Company on June 30, 2020, included the following: Common stock, $1 par; authorized, 6 million shares; issued and outstanding, 2 million shares $ 2,000,000 Paid-in capital—excess of par 8,000,000 Retained earnings 9,000,000
On April 1, 2021, the board of directors of Core Technologies declared a 10% stock dividend on common shares, to be distributed on June 1. The market price of Core Technologies’ common stock was $22 on April 1, 2021, and $32 on June 1, 2021.
Required: Complete the below table to calculate the stock dividend. Prepare the journal entries to record the declaration and distribution of the stock dividend.
Complete the below table to calculate the stock dividend.
|
In: Accounting
The shareholders’ equity of Core Technologies Company on June
30, 2020, included the following:
| Common stock, $1 par; authorized, 8 million shares; issued and outstanding, 4 million shares |
$ | 4,000,000 | |
| Paid-in capital—excess of par | 12,000,000 | ||
| Retained earnings | 34,000,000 | ||
On April 1, 2021, the board of directors of Core Technologies
declared a 25% stock dividend on common shares, to be distributed
on June 1. The market price of Core Technologies’ common stock was
$30 on April 1, 2021, and $40 on June 1, 2021.
Required:
1. Prepare the journal entry to record the stock dividend if the
company treats the distribution as normal stock dividends.
2. Prepare the journal entry to record the stock dividend if the company treats the distribution as "large" stock dividends effected in the form of a stock dividend.
3. Prepare the journal entry to record the stock dividend if the company treats the distribution as a stock split.
In: Accounting
On January 1, 2020, the ledger of Bramble Company contains the
following liability accounts.
| Accounts Payable | $51,000 | |
| Sales Taxes Payable | 9,000 | |
| Unearned Service Revenue | 16,500 |
During January, the following selected transactions
occurred.
| Jan. 5 | Sold merchandise for cash totaling $20,520, which includes 8% sales taxes. | |
| 12 | Performed services for customers who had made advance payments of $10,000. (Credit Service Revenue.) | |
| 14 | Paid state revenue department for sales taxes collected in December 2019 ($9,000). | |
| 20 | Sold 900 units of a new product on credit at $50 per unit, plus 8% sales tax. This new product is subject to a 1-year warranty. | |
| 21 | Borrowed $27,000 from Girard Bank on a 3-month, 8%, $27,000 note. | |
| 25 |
Sold merchandise for cash totaling $9,828, which includes 8% sales taxes. Journalize the January transactions. (Credit account
titles are automatically indented when amount is entered. Do not
indent manually. Record journal entries in the order presented in
the problem.) |
In: Accounting
Blue Leasing Company agrees to lease equipment to Kingbird Corporation on January 1, 2020. The following information relates to the lease agreement. 1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2. The cost of the machinery is $489,000, and the fair value of the asset on January 1, 2020, is $699,000. 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $60,000. Kingbird estimates that the expected residual value at the end of the lease term will be 60,000. Kingbird amortizes all of its leased equipment on a straight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1, 2020. 5. The collectibility of the lease payments is probable. 6. Blue desires a 9% rate of return on its investments. Kingbird’s incremental borrowing rate is 10%, and the lessor’s implicit rate is unknown. (Assume the accounting period ends on December 31.)
Calculate the amount of the annual rental payment required.
(Round present value factor calculations to 5 decimal
places, e.g. 1.25124 and the final answer to 0 decimal places e.g.
58,972.)
| Annual rental payment | $ |
In: Accounting
Answer separately:
1. The adjusted trial balance of Miller Company at December 31,
2020, includes the following accounts: Owner’s Capital $16,400,
Owner’s Drawings $7,000, Service Revenue $39,000, Salaries and
Wages Expense $16,000, Insurance Expense $2,000, Rent Expense
$4,000, Supplies Expense $1,500, and Depreciation Expense $1,300.
Prepare an income statement for the year.
2. Partial adjusted trial balance data for Miller Company is presented in the previous exercise. The balance in Owner’s Capital is the balance as of January 1. Prepare an owner’s equity statement for the year assuming net income is $14,200 for the year.
In: Accounting
Wildhorse Inc., a greeting card company, had the following
statements prepared as of December 31, 2020.
|
WILDHORSE INC. |
||||||
|---|---|---|---|---|---|---|
|
12/31/20 |
12/31/19 |
|||||
|
Cash |
$6,100 |
$6,900 |
||||
|
Accounts receivable |
61,900 |
50,600 |
||||
|
Short-term debt investments (available-for-sale) |
34,700 |
18,100 |
||||
|
Inventory |
40,000 |
59,400 |
||||
|
Prepaid rent |
5,000 |
4,000 |
||||
|
Equipment |
152,800 |
128,900 |
||||
|
Accumulated depreciation—equipment |
(34,900 |
) |
(25,100 |
) |
||
|
Copyrights |
46,100 |
50,400 |
||||
|
Total assets |
$311,700 |
$293,200 |
||||
|
Accounts payable |
$45,800 |
$40,100 |
||||
|
Income taxes payable |
3,900 |
6,000 |
||||
|
Salaries and wages payable |
8,100 |
4,000 |
||||
|
Short-term loans payable |
8,100 |
10,100 |
||||
|
Long-term loans payable |
59,900 |
69,400 |
||||
|
Common stock, $10 par |
100,000 |
100,000 |
||||
|
Contributed capital, common stock |
30,000 |
30,000 |
||||
|
Retained earnings |
55,900 |
33,600 |
||||
|
Total liabilities & stockholders’ equity |
$311,700 |
$293,200 |
||||
|
WILDHORSE INC. |
||||
|---|---|---|---|---|
|
Sales revenue |
$339,275 |
|||
|
Cost of goods sold |
174,600 |
|||
|
Gross profit |
164,675 |
|||
|
Operating expenses |
120,100 |
|||
|
Operating income |
44,575 |
|||
|
Interest expense |
$11,200 |
|||
|
Gain on sale of equipment |
2,000 |
9,200 |
||
|
Income before tax |
35,375 |
|||
|
Income tax expense |
7,075 |
|||
|
Net income |
$28,300 |
|||
Additional information:
| 1. | Dividends in the amount of $6,000 were declared and paid during 2020. | |
| 2. | Depreciation expense and amortization expense are included in operating expenses. | |
| 3. | No unrealized gains or losses have occurred on the investments during the year. | |
| 4. | Equipment that had a cost of $20,100 and was 70% depreciated was sold during 2020. |
Prepare a statement of cash flows using the indirect method.
(Show amounts that decrease cash flow with either a -
sign e.g. -15,000 or in parenthesis e.g.
(15,000).)
In: Accounting
On January 1, 2020, Sandhill Company purchased 8% bonds having a maturity value of $400,000, for $433,699.52. The bonds provide the bondholders with a 6% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Sandhill Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.
Prepare the journal entry at the date of the bond purchase. (Enter answers to 2 decimal places, e.g. 2,525.25. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
Jan. 1, 2020 |
enter an account title to record the transaction on January 1, 2020 |
enter a debit amount |
enter a credit amount |
|
enter an account title to record the transaction on January 1, 2020 |
enter a debit amount |
enter a credit amount |
eTextbook and Media
Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 2,525.25.)
|
Schedule of Interest Revenue and Bond Premium
Amortization |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
|
|
Cash |
Interest |
Premium |
Carrying Amount |
|||||
|
1/1/20 |
$enter a dollar amount rounded to 2 decimal places |
$enter a dollar amount rounded to 2 decimal places |
$enter a dollar amount rounded to 2 decimal places |
$enter a dollar amount rounded to 2 decimal places |
|||||
|
1/1/21 |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
|||||
|
1/1/22 |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
|||||
|
1/1/23 |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
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|
1/1/24 |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
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|
1/1/25 |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
|||||
eTextbook and Media
Prepare the journal entry to record the interest revenue and the amortization at December 31, 2020. (Round answers to 2 decimal places, e.g. 2,525.25. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
Dec. 31, 2020 |
enter an account title to record the transaction on December 31, 2020 |
enter a debit amount |
enter a credit amount |
|
enter an account title to record the transaction on December 31, 2020 |
enter a debit amount |
enter a credit amount |
|
|
enter an account title to record the transaction on December 31, 2020 |
enter a debit amount |
enter a credit amount |
eTextbook and Media
Prepare the journal entry to record the interest revenue and the amortization at December 31, 2021. (Round answers to 2 decimal places, e.g. 2,525.25. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
Dec. 31, 2021 |
enter an account title to record the transaction on December 31, 2021 |
enter a debit amount |
enter a credit amount |
|
enter an account title to record the transaction on December 31, 2021 |
enter a debit amount |
enter a credit amount |
|
|
enter an account title to record the transaction on December 31, 2021 |
In: Accounting
On January 1, 2020, Flounder Company acquires $130,000 of Spiderman Products, Inc., 9% bonds at a price of $120,632. Interest is received on January 1 of each year, and the bonds mature on January 1, 2023. The investment will provide Flounder Company a 12% yield. The bonds are classified as held-to-maturity.
(a)
Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the straight-line method. (Round answers to 0 decimal places, e.g. 2,500.)
|
Schedule of Interest Revenue and Bond Discount
Amortization |
||||||||
|---|---|---|---|---|---|---|---|---|
|
|
Cash |
Interest |
Bond Discount |
Carrying Amount |
||||
| 1/1/20 |
$enter a dollar amount |
$enter a dollar amount |
$enter a dollar amount |
$enter a dollar amount |
||||
| 1/1/21 |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
||||
| 1/1/22 |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
||||
| 1/1/23 |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
||||
eTextbook and Media
Attempts: 0 of 3 used
Using multiple attempts will impact your score.
20% score reduction after attempt 2
(b)
The parts of this question must be completed in order. This part will be available when you complete the part above.
(c) and (d)
The parts of this question must be completed in order. This part will be available when you complete the part above.
In: Accounting