ORIE 3150 Quiz _6 Fall 2009 answers

ORIE 3150 Quiz _6 Fall 2009 answers - ORIE 3150 Name...

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ORIE 3150 Name (please print)_____________________________________ Quiz #6 Open Notes and Book 1. Boise Cascade Corp. issued a 10-year bond on January 1, 2008. The bond has a face interest rate of 8%, face value of $20,000,000, and pays interest semi-annually. The bond was issued at such a price as to yield 8.86% annually. a. Provide Boise Cascade’s journal entry to record the sale of the bond on January 1, 2008. b. Provide Boise Cascade’s journal entry to record the payment of interest and amortization on June 30, 2008. Use the effective interest method.
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2. Checker Industries makes clothing. The company leased a scrap baler from Graywolf Machines Inc. on January 1, 2009. Lease payments of $4,442.74 were due at the end of each quarter for 16 quarters (four years). The useful life of the scrap baler was 5 years. The annual interest rate was 10%. There was neither an ownership transfer, nor a bargain purchase option. The fair market value of the scrap baler was $58,000. The salvage value was considered to be negligible, and depreciation was straight-line,
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This note was uploaded on 10/25/2010 for the course ORIE 3150 taught by Professor Callister during the Fall '08 term at Cornell.

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ORIE 3150 Quiz _6 Fall 2009 answers - ORIE 3150 Name...

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