Mgmt_200_Spring_2007_Exam_Final(4,17)

Mgmt_200_Spring_2007_Exam_Final(4,17) - Name: _ PUID: _...

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Name: ________________________ PUID: ________________________ Purdue University Krannert School of Management MGMT 200 – Introductory Financial Accounting Spring 2007 Final Exam – May 1, 2007 This exam consists of 4 questions on 10 pages (excluding this cover page and the present value table page) for a total of 100 points. Time allowed: 90 minutes. Answer all questions. To ensure full credit and to maximize partial credit, clearly show all supporting calculations. The exam is closed book. A calculator is permitted. Present value tables are provided on the last page. GOOD LUCK . Question 1 (28 points) ________ Question 2 (24 points) ________ Question 3 (24 points) ________ Question 4 (24 points) ________ TOTAL (100 points) ________
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PART A: SiClone Corporation issues 20% coupon bonds on January 1, 2007. The bonds have a face value of $500,000, interest is payable annually on December 31, and have a term of fifteen years. The market rate of interest on January 1, 2007 is 11%. Required: a. At what price (where par = 100) would the 20% bonds be issued? b. Prepare the journal entry to record the issuance of the 20% coupon bonds on January 1, 2007. c. Prepare the journal entry to record interest expense and the interest payment on the 20% coupon bonds on December 31, 2007, using the effective interest rate method. d. Prepare the journal entry to record interest expense and the interest payment on the 20% coupon bonds on December 31, 2007, using the straight-line amortization method. Question 1 continued over . . . Mgmt 200 – Final Exam – Spring 2007 – page 1
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This note was uploaded on 11/22/2009 for the course MGMT 200 taught by Professor Greigg during the Spring '08 term at Purdue University-West Lafayette.

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Mgmt_200_Spring_2007_Exam_Final(4,17) - Name: _ PUID: _...

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