SOLUTIONS Chapter 14

SOLUTIONS Chapter 14 - SOLUTIONS Chapter 14 BRIEF EXERCISE...

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Unformatted text preview: SOLUTIONS Chapter 14 BRIEF EXERCISE 14-1 Present value of the principal $500,000 X .37689 ................................................................................. $188,445 Present value of the interest payments $22,500 X 12.46221 ............................................................................... 280,400 Issue price ..................................................................................... $468,845 BRIEF EXERCISE 14-2 (a) Cash ............................................................................................ 300,000 Bonds Payable ................................................................. 300,000 (b) Interest Expense .......................................................................... 15,000 Cash ($300,000 X 10% X 6/12) ........................................ 15,000 (c) Interest Expense .......................................................................... 15,000 Interest Payable ............................................................... 15,000 BRIEF EXERCISE 14-3 (a) Cash ($300,000 X 98%) ............................................................... 294,000 Discount on Bonds Payable ......................................................... 6,000 Bonds Payable ................................................................. 300,000 (b) Interest Expense .......................................................................... 15,600 Discount on Bonds Payable ($6,000 X 1/10 = $600).................................................. 600 Cash ($300,000 X 10% X 6/12) ........................................ 15,000 (c) Interest Expense .......................................................................... 15,600 Discount on Bonds Payable ($6,000 X 1/10 = $600).................................................. 600 Interest Payable ............................................................... 15,000 BRIEF EXERCISE 14-4 (a) Cash ($300,000 X 103%) ............................................................. 309,000 Bonds Payable ................................................................. 300,000 Premium on Bonds Payable ............................................. 9,000 (b) Interest Expense .......................................................................... 14,100 Premium on Bonds Payable ($9,000 X 1/10 = $900) ............................................................. 900 Cash ($300,000 X 10% X 6/12) ........................................ 15,000 (c) Interest Expense .......................................................................... 14,100 Premium on Bonds Payable ($9,000 X 1/10 = $900) ............................................................. 900 Interest Payable ............................................................... 15,000 BRIEF EXERCISE 14-5 (a) Cash ............................................................................................ 408,000 Bonds Payable ................................................................. 400,000 Interest Expense...
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SOLUTIONS Chapter 14 - SOLUTIONS Chapter 14 BRIEF EXERCISE...

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