ch11 P11- 7A , 8A - Week Three Team D Problems Sarah Golob,...

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Week Three Team D Problems Sarah Golob, Melissa Pearcy, Rick Spickard, Lisa Sykes Acc 363 University of Phoenix Chapter 11 Problems P11-7A & P11-8A P11-7A Semiannual Interest: 5,000,000 x 10% x 1/2 = 250,000 A) 1) Date Account Title July 1 Cash Bonds Payable Premium on Bonds Payable (To record issuance of bonds 10%, 10 yr) 2) 2006 Dec 31 Bond Interest Expense Premium on Bonds Payable Bond Interest Payable (To record accrued interest and amortization of bond premium) 3) 2007 July 1 Bond Interest Expense Premium on Bonds Payable Cash (To record payment of bond interest and amortization of bond p 4) Dec 31 Bond Interest Expense Premium on Bonds Payable Bond Interest Payable (To record accrued interest and amortization of bond premium) B) Strigel Chemical Company Balance Sheet (partial) Long-term liabilities Bonds payable, 10%, due in 2016 5,000,000 Add: Premium on bonds payable 608,302 56,088,302 C) 1 The amount of interest expense to be reported for 2007 is $451,588.
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2 The amount for 2007 is greater $451,588 than if the straight-line method were used $432,04 3 The total cost of borrowing over the life of the bond is $4,320,467.
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This note was uploaded on 09/11/2009 for the course ACC 362 taught by Professor Wormer during the Spring '07 term at University of Phoenix.

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ch11 P11- 7A , 8A - Week Three Team D Problems Sarah Golob,...

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