136B Notes 2_3_11

Disc 1202 3900000 100 97 amort 1202 1207

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Unformatted text preview: . disc., 1/2/02 (3%*$900,000) ^100%-97% Amort., 1/2/02-1/2/07 *[($27,000/10yrs)*5yrs] Unamortized Disc, 1/2/07 2) Original issue costs, 1/2/02 *must pro-rate! *[$24,000*(900,000/1,500,000)] Amort., 1/2/07 *[($14,400/10)*5] J/E- 1/2/07: Bonds Payable $ 900,000 Loss $ 29,700 Discount Issue Costs Cash $ $ $ 13,500 7,200 909,000 $ 27,000 $ $ (13,500) 13,500 $ 14,400 $ $ (7,200) 7,200 Long Term Notes Payable *Notes issued for property, goods, or services *Stated rate ona N/P os assumed to be fair UNLESS: 1) No rate is stated, or 2) Stated rate appears unreasonable, or 3) The FV of what was received (property, goods, services, etc.) is materially different from the face amount of the note If the stated rate on N/P is unfair: 1) Recored what was received at its FMV; the PV of the note is measured based on this FMV EX: N/P of $100,000 with a stated interest rate of 3% is issued for land with a FMV of $95,000 Acquisition J/E: Land 95,000 Disc. (plug) 5,000 N/P 100,000 ORRRRR… 2) If FMV is unknown, impute an interest rate. Record what was rec'd at PV of the payments, using the imputed rate EX: A non interest bearing $100,000 note payable...
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