7252569-MIdterm-1 (dragged) 28

7252569-MIdterm-1 (dragged) 28 - Kieso Weygandt Warfield...

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Kieso, Weygandt, Warfield, Young, Wiecek Intermediate Accounting, Eighth Canadian Edition 14-12 TEACHING TIP Illustration 14-3 provides a review problem of accounting for bonds. The numerical example requires calculating bond discount, recording issuance of bonds, preparing an effective interest method amortization schedule, and preparing journal entries to record interest expense, amortization of bond discount and bond issuance costs. C. Long-Term Notes Payable 1. The following categories of transactions are considered: a. Zero interest-bearing notes issued for cash : The implicit interest rate is the rate that equates the cash received (present value) with the amounts received in the future. The difference between the face amount and the present value of the note is the discount or premium and it is amortized over the life of the note. b. Interest-bearing notes with an effective yield different than the stated rate: If a stated interest rate is unreasonable, an imputed interest rate must be
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This note was uploaded on 03/28/2012 for the course ACCTG ACC423 taught by Professor Smith during the Spring '10 term at University of Phoenix.

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