PS_09_Solution_(APSCW_-_F2009)

PS_09_Solution_(APSCW_-_F2009) - FINANCIALACCOUNTING...

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BUSI W3013 Solution to Problem Set 09 | Page 1 F INANCIAL A CCOUNTING BUSI W3013 | F ALL 2009 S OLUTION TO P ROBLEM S ET 09 PROFESSOR ANDREW SCHMIDT I. JSO Company Issue price: Bond 1 (Issued on 07/01/2007): Issue price 2 05 . 1 000 , 1 100 05 . 1 100 = 1,092.97 Bond 2 (Issued on 10/01/2007): Issue price 5 05 . 1 000 , 1 30 05 . 1 30 = 913.41 Amortization schedule: Year Beginning Balance Interest Expense Coupon Premium Amortization Ending Balance 1 1,092.97 54.65 100.00 45.35 1,047.62 2 1,047.62 52.38 100.00 47.62 1,000.00 Year Beginning Balance Interest Expense Coupon Discount Amortization Ending Balance 1 913.41 45.67 30.00 15.67 929.08 2 929.08 46.45 30.00 16.45 945.54 3 945.54 47.28 30.00 17.28 962.81 4 962.81 48.14 30.00 18.14 980.95 5 980.95 49.05 30.00 19.05 1,000.00 Journal entries: 07/01/2007: Assets = Liabilities + CC + RE D+[C–] D–[C+] D–[C+] D–[C+] Cash Bonds Payable Premium on BP +$1,092.97 +$1,000 +$92.97
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BUSI W3013 Solution to Problem Set 09 | Page 2 10/01/2007: Assets = Liabilities + CC + RE D+[C–] D–[C+] D–[C+] D–[C+] Cash Discount on BP Bonds Payable +$913.41 -$86.59 +$1000.00 12/31/2007 (Adjusting Entries): Assets = Liabilities + CC + RE D+[C–] D–[C+] D–[C+] D–[C+] Cash Sales +$200 +$200 Expenses Cash –$120 –$120 Interest Exp: B1 Interest Exp: B2 Premium on BP Discount on BP Interest Payable: B1 Interest Payable: B2 –$22.68 +3.92 +$50.00 +$7.50 –$27.32 –$11.42 12/31/2007 (Closing Entries): Assets = Liabilities
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PS_09_Solution_(APSCW_-_F2009) - FINANCIALACCOUNTING...

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