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test 1 acct 3312 fall11 - Name Test 1 Intermediate...

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Name: __________________________ Test 1 Intermediate Accounting 3312 Chapters 14-16 Fall 2011 Page 1
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1. Bond issue price and premium amortization. On January 1, 2011, Friedman Co. issued ten-year bonds with a face value of $10,000,000 and a stated interest rate of 5%, payable semiannually on June 30 and December 31. The bonds were sold to yield 4%. The proceeds were $10,817,572. Instructions (a) Prepare the amortization table for 2011 and 2012, assuming that amortization is recorded on interest payment dates. (b) Prepare journal entries for the sale; Interest payment on 12/31/2012; and the repurchase and retirement on 1/1/13 at 105. Carrying Value Cash Interest Amortization 6/30/11 12/31/11 6/30/12 12/31/12
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2. Treasury stock. In 2009, Pennington Co. issued 150,000 of its 500,000 authorized shares of $5 par value common stock at $34 per share. In January, 2010, Pennington repurchased 5,000 shares at $36 per share. Assume these are the only stock transactions the company has ever had. Instructions (a) Prepare the journal entry to record the purchase of treasury stock by the cost method.
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