POA11e13

# POA11e13 - CHAPTER 13Solutions LONG-TERM LIABILITIES...

This preview shows pages 1–7. Sign up to view the full content.

Ch13 SE1 to SE3 CHAPTER 13—Solutions LONG-TERM LIABILITIES Chapter 13, SE 1. 1. Advantage 2. Disadvantage 3. Disadvantage 4. Advantage 5. Advantage Chapter 13, SE 2. a. 4 b. 7 c. 1 d. 3 e. 2 f. 6 g. 5 Chapter 13, SE 3. Interest for 1 Monthly Month at 0.6667%* Reduction Unpaid Balance Month Payment on Unpaid Balance in Debt at End of Period 0 \$150,000 1 \$1,200 \$1,000 \$200 149,800 2 1,200 999 ** 201 149,599 3 1,200 997 ** 203 149,396 * 8% ÷ 12 = 0.006667 **Rounded.

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

View Full Document
Ch13 SE4 Chapter 13, SE 4. Choice A Present value of 40 periodic payments at 6% (from Table 2*) \$32,000 × 15.046 #VALUE! Present value of a single payment at the end of 40 periods at 6% (from Table 1*) \$600,000 × 0.097 58,200 Total present value of Choice A #VALUE! Choice B Present value of 30 periodic payments at 6% (from Table 2*) \$30,000 × 13.765 #VALUE! Present value of a single payment at the end of 30 periods at 6% (from Table 1*) \$600,000 × 0.174 #VALUE! Total present value of Choice B #VALUE! Total present value of both bonds #VALUE! *From the appendix on present value tables.
Ch13 SE5 Chapter 13, SE 5. 2010 Apr. 1 Cash 7,840,000 Unamortized Bond Discount 160,000 Bonds Payable 8,000,000 Issued 8%, 5-year bonds at 98 \$8,000,000 × 0.98 = \$7,840,000 Oct. 1 Bond Interest Expense 336,000 Unamortized Bond Discount 16,000 Cash 320,000 To pay semiannual interest and amortize the discount \$160,000 ÷ ( 5 years × 2 ) = \$16,000 \$8,000,000 × 0.08 × 6 / 12 = \$320,000 2011 Apr. 1 Bond Interest Expense 336,000 Unamortized Bond Discount 16,000 Cash 320,000 To pay semiannual interest and amortize the discount \$160,000 ÷ ( 5 years × 2) = \$16,000 \$8,000,000 × 0.08 × 6 / 12 = \$320,000

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

View Full Document
Ch13 SE6 Chapter 13, SE 6. 2011 Mar. 1 Cash 439,600 Unamortized Bond Premium 39,600 Bonds Payable 400,000 Sold 9%, 20-year bonds at 109.9 Aug. 31 Bond Interest Expense 17,584 Unamortized Bond Premium 416 Bond Interest Payable 18,000 To record accrued semiannual interest and amortize premium on 9%, 20-year bonds ( \$400,000 × 0.09 × 6 / 12 ) – ( \$439,600 × 0.08 × 6 / 12 ) = \$18,000 \$17,584 = \$416 Sept. 1 Bond Interest Payable 18,000 Cash 18,000 Paid semiannual interest
Ch13 SE7 to SE8 Chapter 13, SE 7. Dec. 1 Bonds Payable 120,000 Loss on Retirement of Bonds #VALUE! Unamortized Bond Discount 3,150 Cash #VALUE! Retired 8% bonds at call price of 104 \$120,000 × 1.04 = #VALUE! \$120,000 × \$5,250 = \$3,150 \$200,000 Chapter 13, SE 8. 2011 Mar. 1 Bonds Payable 1,200,000 Unamortized Bond Discount 24,000 Common Stock 240,000 Additional Paid-in Capital 936,000 Converted \$1,200,000 of 6% bonds into common stock at the rate of 20 shares for each \$1,000 bond 1,200 × 20 shares = 24,000 shares 24,000 shares × \$10 = \$240,000 \$1,200,000 × \$40,000 = \$24,000 \$2,000,000 \$1,200,000 ( \$24,000 + \$240,000 ) = \$936,000

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

View Full Document
Ch13 SE9 Chapter 13, SE 9. 1.
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 50

POA11e13 - CHAPTER 13Solutions LONG-TERM LIABILITIES...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online