Unformatted text preview: $" sign in your re sponse .)
Annual pay ments $ 10,926 b. Calc ulate the total amount of interes t that will be earned by the fund over the 20-y ear period. (Round
your FV fa ctor to 3 de cim a l pla ce s. Do not round your inte rm e dia te ca lcula tions a nd round
your fina l a nsw e r to the ne a re st dolla r a m ount. Om it the "$" sign in your re sponse .) Total interes t $
281,478 ± 2 c. Mak e the general journal entry to rec ord redemption of the bond is s ue at the end of the 20-y ear period,
as s uming that the s ink ing fund is rec orded on Tilman's ac c ounting rec ords at $500,000 and bonds
pay able are rec orded at the s ame amount. (Om it the "$" sign in your re sponse .)
Bond pay able Debit
500,000 Bond s ink ing fund Credit
500,000 d. W hat would be the effec t of an inc reas e in the rate of return on the required annual pay ment?
Reduc es the amount of pay ment required by Tilman.
Explanation: a . Annual pay ment: $500,000 ÷ 45.762 (from Table FA-2) = $10,926
b. Interes t earned: $500,000 − $218,522 (...
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This note was uploaded on 01/30/2014 for the course ACC 111 taught by Professor Angela during the Fall '08 term at Delaware County CC.
- Fall '08