chp2&3 - 18 CHAPTER2 Problem21 Problem22 1.A 2.B...

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    18    CHAPTER  2 Problem  2-1 Problem 2-2 1.  A    1.  A 6.  D 2.  B    2.  D 7.  A 3.  A    3.  A 8.  D 4.  C    4.  D 9.  D 5.  A     5.  B    10.  B Problem 2-3 Requirement 1 2008 April    1 Cash (7,000,000 x 106%) 7,420,000 Bonds payable    7,000,000 Premium on bonds payable  420,000 Oct.    1 Interest expense (7,000,000 x 12% x 6/12)    420,000 Cash   420,000 Dec. 31 Interest expense (7,000,000 x 12% x 3/12)    210,000 Accrued interest payable   210,000    31 Premium bonds payable      31,500 Interest expense (420,000 / 10 x 9/12)     31,500 2009 Jan.    1 Accrued interest payable    210,000 Interest expense   210,000 April   1 Interest expense         420,000 Cash   420,000
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Oct.    1 Interest expense    420,000 Cash   420,000 Dec. 31 Interest expense    210,000 Accrued interest payable   210,000 31 Premium on bonds payable      42,000 Interest expense (420,000 / 10)     42,000   19 Requirement 2 Noncurrent liabilities: Bonds payable     7,000,000 Premium on bonds payable        346,500 Book value     7,346,500 Problem 2-4 Requirement 1 2008 Jan.    1 Unissued bonds payable    8,000,000 Authorized bonds payable     8,000,000   1 Cash (5,000,000 x 95%)    4,750,000 Discount on bonds payable  250,000 Unissued bonds payable     5,000,000   June 30 Interest expense (5,000,000 x 12% x 6/12)  300,000 Cash   300,000 Dec. 31 Interest expense  300,000 Cash   300,000 31 Interest expense (250,000 / 10)   25,000 Discount on bonds payable    25,000
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2009 June 30 Interest expense 300,000 Cash  300,000   Sept.   1 Cash   2,100,000 Unissued bonds payable    2,000,000 Premium on bonds payable    60,000 Interest expense (2,000,000 x 12% x 2/12)    40,000 Dec. 31 Interest expense 420,000 Cash (7,000,000 x 12% x 6/12)  420,000      31 Interest expense   25,000 Discount on bonds payable    25,000      31 Premium on bonds payable     2,400 Interest expense         2,400 20 120 months – 20  =  100 months remaining        60,000 / 100  =  600 monthly   600 x 4  =  2,400 Requirement 2 Noncurrent liabilities: Authorized bonds payable     8,000,000 Less: Unissued bonds payable     1,000,000 Issued bonds payable     7,000,000 Premium on bonds payable          57,600 Total     7,057,600 Discount on bonds payable   (   200,000) Book value     6,857,600 Problem 2-5 Requirement 1 2008
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April    1   Cash      4,850,000   Discount on bonds payable    100,000   Bond issue cost      50,000   Bonds payable     5,000,000 Oct.    1   Interest expense    300,000  Cash (5,000,000 x 12% x 6/12)        300,000
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chp2&3 - 18 CHAPTER2 Problem21 Problem22 1.A 2.B...

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