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# tutorial_8 - AP106 Req 1 Computations Interest \$4,000,000 x...

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AP10–6. Req. 1 Computations: Interest: \$4,000,000 x 9% = \$ 360,000 Present value \$ 4,000,000 x 0.7473 = 2,989,200 \$ 360,000 x 4.2124 = 1,516,464 Issue Price \$4,505,664 Req. 2 2009 2010 Interest expense ...................................... \$270,340* \$264,960** \$4,505,664 x 6% = \$270,340 **[\$4,505,664 - (\$360,000 - \$270,340)] x 6% = \$264,960 Req. 3 2009 2010 Cash paid ................................................. \$360,000 \$360,000 Req. 4 2009 2010 Bonds payable ......................................... \$4,416,004 \$4,320,964** *\$4,505,664 - \$89,660 = \$4,416,004 ** \$4,416,004 - \$95,040 = \$4,320,964
E10–16. Computations: Interest: \$2,000,000 x 5% = \$ 100,000 Present value: \$2,000,000 x 0.4350 = 870,000 \$ 100,000 x 13.2944 = 1,329,440 Issue price = \$2,199,440 Req. 1 January 1: Cash (+A) ............................................................................... 2,199,440 Premium on Bonds Payable (+L) ....................................... 199,440 Bonds Payable (+L) ........................................................... 2,000,000 Req. 2 June 30: Bond Interest Expense (+E, -SE) (\$2,199,440 x 4.25%) ...... 93,476 Premium on Bonds Payable (-L) ............................................ 6,524 Cash (-A) ............................................................................. 100,000 Req. 3 June 30, 2009: Income statement: Bond interest expense \$ 93,476 Balance sheet: Long-term Liabilities Bonds payable \$2,000,000 Plus: Unamortized premium (\$199,440 – \$6,524) 192,916 \$2,192,916 E10–16. Computations: Interest: \$2,000,000 x 5% = \$ 100,000 Present value:

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\$2,000,000 x 0.4350 = 870,000 \$ 100,000 x 13.2944 = 1,329,440 Issue price = \$2,199,440 Req. 1 January 1: Cash (+A) ............................................................................... 2,199,440 Premium on Bonds Payable (+L) ....................................... 199,440 Bonds Payable (+L) ........................................................... 2,000,000 Req. 2 June 30: Bond Interest Expense (+E, -SE) (\$2,199,440 x 4.25%) ...... 93,476 Premium on Bonds Payable (-L) ............................................ 6,524 Cash (-A) ............................................................................. 100,000 Req. 3 June 30, 2009: Income statement: Bond interest expense \$ 93,476 Balance sheet: Long-term Liabilities Bonds payable \$2,000,000 Plus: Unamortized premium (\$199,440 – \$6,524) 192,916 \$2,192,916 P10–12.
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tutorial_8 - AP106 Req 1 Computations Interest \$4,000,000 x...

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