CH 14 Solutions(1) - EXERCISE 14-1 (a) (b) (c) (d) (e) (f)...

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EXERCISE 14-1 (a) Current liability if current assets are used to satisfy the debt. (b) Valuation account relating to the long-term liability, bonds payable (sometimes referred to as an adjunct account). The $3,000 would continue to be reported as long-term. (c) Current liability, $250,000; long-term liability, $750,000. (d) Current liability. (e) Probably noncurrent, although if operating cycle is greater than one year and current assets are used, this item would be classified as current. (f) Current liability. (g) Current liability unless (a) a fund for liquidation has been accumulated which is not classified as a current asset or (b) arrangements have been made for refinancing. (h) Current liability. (i) Current liability. EXERCISE 14-10 (a) January 1, 2010 Cash. .......................................................... .................................................................... 860,651.79 Premium on Bonds Payable. .......... 60,651.79 Bonds Payable. ................................ 800,000.00 (b) Schedule of Interest Expense and Bond Premium Amortization Effective-Interest Method 12% Bonds Sold to Yield 10% Date Cash Paid Interest Expense Premium Amortized Carrying Amount of Bonds
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1/1/10 $860,651.79 12/31/10 $96,000.00 $86,065.18 $ 9,934.82 850,716.97 12/31/11 96,000.00 85,071.70 10,928.30 839,788.67 12/31/12 96,000.00 83,978.87 12,021.13 827,767.54 (c) December 31, 2010 Interest Expense. ...................................... 86,065.18 Premium on Bonds Payable. ................... 9,934.82 Cash. ................................................. 96,000.00
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CH 14 Solutions(1) - EXERCISE 14-1 (a) (b) (c) (d) (e) (f)...

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