1-20-11 Solutions

1-20-11 Solutions - EXERCISE 14-2 (a) Discount on Bonds...

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

View Full Document Right Arrow Icon
EXERCISE 14-2 (a) Discount on Bonds Payable—Contra account to bonds payable on balance sheet. (b) Interest expense (credit balance)—Reclassify to interest payable on balance sheet. (c) Unamortized Bond Issue Costs—Classified as “Other Assets” on balance sheet. (d) Gain on repurchase of debt—Classify as part of other gains and losses on the income statement. (e) Mortgage payable—Classify one-third as current liability and the remainder as long-term liability on balance sheet. (f) Debenture bonds—Classify as long-term liability on balance sheet. (g) Premium on bonds payable—Classify as adjunct account to Bonds Payable on balance sheet. (h) Notes payable—Classify as long-term liability on balance sheet. (i) Income bonds payable—Classify as long-term liability on balance sheet.
Background image of page 1

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

View Full DocumentRight Arrow Icon
EXERCISE 14-4 (a) 1/1/11 Cash ($800,000 X 102%). .......................... 816,000 Bonds Payable. ............................... 800,000 Premium on Bonds Payable. ......................................... 16,000 (b) 7/1/11 Interest Expense. ...................................... 39,600 Premium on Bonds Payable ($16,000 ÷ 40). ........................................ 400
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.

This note was uploaded on 01/31/2011 for the course MGMT 351 taught by Professor Staff during the Spring '08 term at Purdue University.

Page1 / 8

1-20-11 Solutions - EXERCISE 14-2 (a) Discount on Bonds...

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