FB2100 Chapt10_solutions_Ex10-1,DQ1-2,QS 10-8

FB2100 - 153,000 Cash 153,000 Paid semiannual interest on bonds 3 2011(a Jan 1 Cash 3,332,000 Discount on Bonds Payable 68,000 Bonds Payable

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FB2100 – Accounting I – Semester A 2010 Solutions to Assigned Questions – Chapter 10 DISCUSSION QUESTIONS 1. A bond is a liability of the issuing company. A share of stock represents an ownership interest in the company. 2. Notes payable generally involve borrowing from a single creditor, whereas bonds payable are usually sold to many different lenders (bondholders). Exercise 10-1 (15 minutes) 1. Semiannual cash interest payment = $3,400,000 x 9% x 1/2 = $153,000 2. Journal entries 2011 (a) Jan. 1 Cash . ............................................................. 3,400,000 Bonds Payable . ...................................... 3,400,000 Sold bonds at par. (b) June 30 Bond Interest Expense . ............................... 153,000 Cash . ....................................................... 153,000 Paid semiannual interest on bonds. (c) Dec. 31 Bond Interest Expense . ...............................
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Unformatted text preview: 153,000 Cash . ....................................................... 153,000 Paid semiannual interest on bonds. 3 . 2011 (a) Jan. 1 Cash* . ............................................................ 3,332,000 Discount on Bonds Payable . ...................... 68,000 Bonds Payable . ...................................... 3,400,000 Sold bonds at 98. *($3,400,000 x 0.98) (b) Jan. 1 Cash* . ............................................................ 3,468,000 Premium on Bonds Payable . ................ 68,000 Bonds Payable . ...................................... 3,400,000 Sold bonds at 102. *($3,400,000 x 1.02) FB2100 – Accounting I – Semester A 2010 Solutions to Assigned Questions – Chapter 10 Quick Study 10-8 (10 minutes) 1. A Registered bond 5. E Convertible bond 2. C Serial bond 6. D Bond Indenture 3. H Secured bond 7. G Sinking fund bond 4. F Bearer bond 8. B Debenture...
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This note was uploaded on 10/20/2011 for the course ACC fb200 taught by Professor Tony during the Spring '11 term at American University in Bulgaria.

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FB2100 - 153,000 Cash 153,000 Paid semiannual interest on bonds 3 2011(a Jan 1 Cash 3,332,000 Discount on Bonds Payable 68,000 Bonds Payable

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