CHAPTER%2014%20-%20SOLUTIONS%20TO%20EXTRA%20EXERCISES

CHAPTER%2014%20-%20SOLUTIONS%20TO%20EXTRA%20EXERCISES -...

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SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 14-1 Present value of the principal $300,000 X .37689 $113,067 Present value of the interest payments $13,500 X 12.46221 168,240 Issue price $281,307 BRIEF EXERCISE 14-2 (a) Cash. ........................................................................................... ..................................................................................................... 200,000 Bonds Payable. .............................................................. 200,000 (b) Interest Expense. ....................................................................... 10,000 Cash ($200,000 X 10% X 6/12). ...................................... 10,000 (c) Interest Expense. ....................................................................... 10,000 Interest Payable. ............................................................ 10,000 BRIEF EXERCISE 14-3 (a) Cash ($200,000 X 98%). ............................................................. ..................................................................................................... 196,000 Discount on Bonds Payable. .................................................... 4,000 Bonds Payable. .............................................................. 200,000 (b) Interest Expense. ....................................................................... 10,000 Cash ($200,000 X 10% X 6/12). ...................................... 10,000 (c) Interest Expense. ....................................................................... 10,000 Interest Payable. ............................................................ 10,000 Interest Expense. ....................................................................... 800 Discount on Bonds Payable. ........................................ 800 ($4,000 X 1/5 = $800)
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BRIEF EXERCISE 14-4 (a) Cash ($200,000 X 103%). ........................................................... ..................................................................................................... 206,000 Bonds Payable. .............................................................. 200,000 Premium on Bonds Payable. ........................................ 6,000 (b) Interest Expense. ....................................................................... 10,000 Cash ($200,000 X 10% X 6/12). ...................................... 10,000 (c) Interest Expense. ....................................................................... 10,000 Interest Payable. ............................................................ 10,000 Premium on Bonds Payable. .................................................... 1,200 Interest Expense ($6,000 X 1/5 = $1,200). .................... 1,200 BRIEF EXERCISE 14-5 (a) Cash. ........................................................................................... ..................................................................................................... 510,000
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CHAPTER%2014%20-%20SOLUTIONS%20TO%20EXTRA%20EXERCISES -...

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