Chap008_Classproblems_solu

Chap008_Classproblems_solu - Solutions to Chapter 8 Inclass...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Solutions to Chapter 8 In‐class Problems E8-3 Bond Sale at Discount a. $16,800 = [($600,000 x .08) + ($12,000 / 5 years)] x 1/3 b. Journal entries recorded by Wood Corporation: January 1, 20X4 Cash 16,000 Interest Receivable 16,000 July 1, 20X4 Cash 16,000 Investment in Carter Company Bonds 800 Interest Income 16,800 $800 = ($400,000 - $392,000)/(5 x 2) December 31, 20X4 Interest Receivable 16,000 Investment in Carter Company Bonds 800 Interest Income 16,800 c. Eliminating entries, December 31, 20X4: E(1) Bonds Payable 400,000 Interest Income 33,600 Investment in Carter Company Bonds 395,200 Bond Discount 4,800 Interest Expense 33,600 $33,600 = $16,000 + $16,000 + $800 + $800 $395,000 = $392,000 + ($800 x 4) $4,800 = $8,000 - ($800 x 4) E(2) Interest Payable 16,000 Interest Receivable 16,000
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Solutions to Chapter 8 In‐class Problems E8-7 Constructive Retirement at End of Year a. Eliminating entries, December 31, 20X5: E(1) Bonds Payable 400,000 Premium on Bonds Payable 9,000 Investment in Able Corporation Bonds
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

Chap008_Classproblems_solu - Solutions to Chapter 8 Inclass...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online