{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter_14_Class_Practice_Problems_Solutions_All

# Chapter_14_Class_Practice_Problems_Solutions_All - Chapter...

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

Chapter 14 Class Practice Problems 1. Grider Industries, Inc. issued \$6,000,000 of 8% debentures on May 1, 2010 and received cash totaling \$5,323,577. The bonds pay interest semiannually on May 1 and November 1. The maturity date on these bonds is November 1, 2018. The firm uses the effective-interest method of amortizing discounts and premiums. The bonds were sold to yield an effective- interest rate of 10%. Instructions Calculate the total dollar amount of discount or premium amortization during the first year (5/1/10 through 4/30/11) these bonds were outstanding. (Show computations and round to the nearest dollar.) Solution Interest Cash Discount Carrying Date Expense Interest Amortized Value of Bonds 5/1/10 \$5,323,577 11/1/10 \$266,179 \$240,000\$26,179 5,349,756 5/1/11 267,488 240,000 27,488 5,377,244 Total\$53,667

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

View Full Document
2. Prepare journal entries to record the following retirement. (Show computations and round to the nearest dollar.) The December 31, 2010 balance sheet of Wolfe Co. included the following items: 7.5% bonds payable due December 31, 2018 \$1,200,000 Unamortized discount on bonds payable 48,000 The bonds were issued on December 31, 2008 at 95, with interest payable on June 30 and December 31. (Use straight-line amortization.) On April 1, 2011, Wolfe retired \$240,000 of these bonds at 101 plus accrued interest.
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 3

Chapter_14_Class_Practice_Problems_Solutions_All - Chapter...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online