ACT_3392_Chp_14_Homework_Solutions

ACT_3392_Chp_14_Homework_Solutions - Intermediate...

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Intermediate Accounting II Amanda N. Paul, CPA, MBA Troy University
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Chapter 14 EXERCISE 14-3 1. Simon Company: (a) 1/1/07 Cash 200,000 Bonds Payable 200,000 (b) 7/1/07 Bond Interest Expense 4,500 ($200,000 X 9% X 3/12) Cash 4,500 (c) 12/31/07 Bond Interest Expense 4,500 Interest Payable 4,500
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EXERCISE 14-3 2. GarFunkle Company (a) 6/1/07 Cash 105,000 Bonds Payable 100,000 Bond Interest Expense 5,000 ($100,000 X 12% X 5/12) (b) 7/1/07 Bond Interest Expense 6,000 Cash 6,000 ($100,000 X 12% X 6/12) (c) 12/31/07 Bond Interest Expense 6,000 Interest Payable 6,000 Note to instructor: Some students may credit Interest Payable on 6/1/07. If they do so, the entry on 7/1/07 will have a debit to Interest Payable for $5,000 and a debit to Bond Interest Expense for $1,000.
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EXERCISE 14-4 (a) 1/1/08 Cash ($600,000 X 102%) 612,000 Bonds Payable 600,000 Premium on Bonds Payable 12,000 (a) 7/1/08 Bond Interest Expense 29,700 Premium on Bonds Payable 300 ($12,000 ÷ 40) Cash 30,000 ($600,000 X 10% X 6/12) (a) 12/31/08 Bond Interest Expense 29,700 Premium on Bonds Payable 300 Interest Payable 30,000
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ACT_3392_Chp_14_Homework_Solutions - Intermediate...

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