Homework Quiz—3

Homework Quiz—3 - Name Homework Quiz3 1...

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

View Full Document Right Arrow Icon
Name: Section Homework Quiz—3 1. On 12/31/10 ABC Company owes $800,000 plus $60,000 accrued interest to Big Bank. ABC’s debt is a 6% note which matures in 2020. ABC is in arrears as its operations became unprofitable two years ago and remain so. On December 31, 2010 Big Bank agreed to accept a used building and land in exchange for ABC’s entire obligation. In ABC’s accounting records, the building has a cost of $1,000,000, accumulated depreciation of $330,000 and the land has a recorded cost of $50,000. The building’s fair value is $540,000 and the land’s fair value is $40,000. Ignore income taxes. 1a : In the space below write ABC’s entry to record the debt settlement 1b : In the space below write Bib Bank’s entry to record the debt settlement 1
Background image of page 1

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

View Full DocumentRight Arrow Icon
2. On April 1, 2010 DEF Company borrowed using a $1,000,000, five–year bond with semiannual interest payments of 4%. The effective interest rate on the bond is 3% per six months. You have the following excerpts from time value of money tables:
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

Homework Quiz—3 - Name Homework Quiz3 1...

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