Chapter 14

# Chapter 14 - CHAPTER 14 Solutions to Exercises Quick Study...

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CHAPTER 14 Solutions to Exercises Quick Study 14-7 2005 July 1 Bonds Payable. ................................................................ 200,000 Premium on Bonds Payable. .......................................... 8,000 Gain on Retirement of Bonds*. ............................... 3,000 Cash. ........................................................................... 205,000 To record retirement of bonds before maturity. *\$3,000 = \$208,000 - \$205,000 Quick Study 14-8 2005 Jan. 1 Bonds Payable. .................................................................. 1,000,000 Common Stock* 250,000 Contributed Capital in Excess of Par Value 750,000 To record retirement of bonds by stock conversion. *500,000 shares x \$0.50

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Exercise 14-1 1. Semiannual cash interest payment = \$1,700,000 x 9% x 1/2 = \$76,500 2. Journal entries 2005 (a) Jan. 1 Cash. ......................................................................... 1,700,000 Bonds Payable. ................................................... 1,700,000 Sold bonds at par. (b) June 30 Bond Interest Expense. ........................................... 76,500 Cash. ................................................................... 76,500 Paid semiannual interest on bonds. (c) Dec. 31 Bond Interest Expense. ........................................... 76,500 Cash. ................................................................... 76,500 Paid semiannual interest on bonds. 3 . 2005 (a) Jan. 1 Cash* 1,666,000 Discount on Bonds Payable. ................................... 34,000 Bonds Payable. ................................................... 1,700,000 Sold bonds at 98. *(\$1,700,000 x 0.98) (b) Jan. 1 Cash* 1,734,000 Premium on Bonds Payable. ............................ 34,000 Bonds Payable. ................................................... 1,700,000 Sold bonds at 102. *(\$1,700,000 x 1.02)
Exercise 14-13 1. Amount of each payment = Initial note balance / Table B.3 value = \$25,000 / 3.3872 = \$7,381 2. Amortization table for the loan Payments Period Ending Date (A) Beginning Balance [Prior (E)]

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## This note was uploaded on 06/29/2008 for the course ACCT 220 taught by Professor William during the Spring '08 term at University of Findlay.

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Chapter 14 - CHAPTER 14 Solutions to Exercises Quick Study...

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