BE3 - Homework # 3 Brief Exercises BE16-1 a) Insuance of...

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Homework # 3 Brief Exercises BE16-1 a) Insuance of shares of common stock 200,000 Market price 10 b) Insuance of bonds 2,000,000 Par value of the bonds 8% Issue Stock Issue Bond Income before interest angd taxes 900,000 900,000 Interest expense from bonds - 160000 Income before income taxes 900,000 740,000 Income tax expense 30% 270000 222000 Net income 630,000 518,000 Outstanding shares 700,000 500,000 Earnings per share 0.9 1.04 BE16-2 a) Jan.1 Cash 4,000,000 Bonds Payable 4,000,000 (To record sale of bonds at face value) b) Jul.1 Bond Interest Expense 160,000 Cash 160,000 (To record payment on bond interest) c) Dec. 31 Bond Interest Expense 160,000 Bond Interest Payable 160,000 (To accrue bond interest) BE16-3 a) Jan.1 Cash 970,000 Cdiscount on Bond Payable 30,000 Bonds Payable 1,000,000 (To record sale of bonds at a discount) b) Jan.1 Cash 1,040,000 Bonds Payable 1,000,000 Premium on Bonds Payable 40,000 (To record sale of bonds at a premium) BE16-4 1) Jan.1 Cash 1,000,000 Bonds Payable 1,000,000 (To record sale of bonds at face value)
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BE3 - Homework # 3 Brief Exercises BE16-1 a) Insuance of...

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