Business, 18.02.2020 22:40 cody1097

In each of the following independent cases the company closes its books on December 31.

1.Sanford Co. sells $500,000 of 10% bonds on March 1, 2014. The bonds pay interest on September 1 and March 1. The due date of the bonds is September 1, 2017. The bonds yield 12%. Give entries through December 31, 2015.

2. Titania Co. sells $400,000 of 12% bonds on June 1, 2014. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2018. The bonds yield 10%. On October 1, 2015, Titania buys back $120,000 worth of bonds for $126,000 (includes accrued interest). Give entries through December 1, 2016.

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.)

Answers: 3

Show answers

Answers

Answer from: Leigh305

cash 472,088 debit

discount on BP 27,912 debit

bonds payable 500,000 credit

--to record issuance--

interest expense28325.29

discount on BP3325.29

cash 25000

--to record first interest payment

interest expense 19,016.53

discount on BP2,349.86

interest payable 16,666.67

--to record accrued interest Dec 31th--

Titania:

Cash 532,316.06

Bonds payable 500,000

Premium on BP 32,316.06

--to record issuance--

interest expense26615.8

Premium on BP 3384.2

cash 30000

--first interest payment--

interest expense4,407.77

Premium on BP 592.23

interest payable 5,000

--to record accrued interest Dec 31th--

Explanation:

Sanford Co.

Present value at market rate:

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C25,000.000

time7

rate0.06

$25000 \times \frac{1-(1+0.06)^{-7} }{0.06} = PV\\$

PV$139,559.5360

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 500,000.00

time 7.00

rate 0.06

$\frac{500000}{(1 + 0.06)^{7} } = PV$

PV 332,528.56

PV c$139,559.5360

PV m $332,528.5568

Total$472,088.0928

then, we solve for the first interest payment

carrying value x market rate

472,088.09 x 0.06 = 28325.29

we compare with the cash outlay and solve for the amortization

28,325.29 - 25,000 = 3,325.29

At year-end we also solve for the accrued interest

(472,088.09 + 3,325.29) x 0.06 x 4/6 = 19,016.53

accured payable:

500,000 x 5% x 4/6 = 16,666.67

amortization 19,016.53 - 16,666.67 = 2,349.86

Titania

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C30,000.000

time8

rate0.05

$30000 \times \frac{1-(1+0.05)^{-8} }{0.05} = PV\\$

PV$193,896.3828

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 500,000.00

time 8.00

rate 0.05

$\frac{500000}{(1 + 0.05)^{8} } = PV$

PV 338,419.68

PV c$193,896.3828

PV m $338,419.6810

Total$532,316.0638

interest first payment:

532,316.06 x 0.05 = 26615.8

then, compare wit hteh cash outlay of 30,000

30,000 - 26,615.8 = 3384.2

accrued interest:

(532,316.06 - 3,384.2) X 0.05 x 1/6 = 4,407.77

payable 30,000 x 1/6 = 5,000

amoritzation 5000 - 4,407.77 = 592.23

Answer from: Quest

i think the answer to your question is b. directive

Answer from: Quest

answer; sales of books;

Another question on Business

Business, 21.06.2019 21:30

The beach dude (bd) employs a legion of current and former surfers as salespeople who push its surfing-oriented products to various customers (usually retail outlets). this case describes bd's sales and collection process. each bd salesperson works with a specific group of customers throughout the year. in fact, they often surf with their customers to try out the latest surf gear. the bd salespeople act laid-back, but they work hard for their sales. each sale often involves hours of surfing with their customers while the customers sample all the latest surf wear. because bd makes the best surfing products, the customers look forward to the visits from the bd salespeople. and they often buy a lot of gear. each sale is identified by a unique invoice number and usually involves many different products. customers pay for each sale in full within 30 days, but they can combine payments for multiple sales. bd manages its clothing inventory by item (e.g., xl bd surfer logo t-shirts), identified by product number, but it also classifies the items by clothing line (the lines are differentiated by price points as well as the intended use of the clothing, e.g., surfing products, casual wear, . draw a uml class diagram that describes the beach dudes sales and collection process.b. using microsoft access, implement a relational database from your uml class diagram. identify at least three fields per table.c. describe how you would use the relational database to determine the beach dude’s accounts receivable.

Answers: 3

Answer

Business, 22.06.2019 02:40

The following accounts are denominated in pesos as of december 31, 2015. for reporting purposes, these amounts need to be stated in u.s. dollars. for each balance, indicate the exchange rate that would be used if a translation is made under the current rate method. then, again for each account, provide the exchange rate that would be necessary if a remeasurement is being made using the temporal method. the company was started in 2000. the buildings were acquired in 2002 and the patents in 2003. (round your answers to 2 decimal places.) exchange rates for 1 peso are as follows: 2000 1 peso = $ 0.28 2002 1 = 0.26 2003 1 = 0.25 january 1, 2015 1 = 0.24 april 1, 2015 1 = 0.23 july 1, 2015 1 = 0.22 october 1, 2015 1 = 0.20 december 31, 2015 1 = 0.16 average for 2015 1 = 0.19

Answers: 3

Answer

Business, 22.06.2019 19:30

Dollar shave club is an ecommerce start-up that delivers razors to its subscribers by mail. by doing this, dollar shave club is using a(n) to disrupt an existing market.a. innovation ecosystem b. architectural innovation c. business model innovation d. incremental innovation

Answers: 2

Answer

Business, 22.06.2019 20:30

What talents or skills do u admire most in others

Answers: 2

Answer

You know the right answer?

In each of the following independent cases the company closes its books on December 31.

...

Questions