Practice final BBUS3211_SW2_PE_10JUL12

The bonds were dated january 1 2008 interest is paid

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Unformatted text preview: zation of Prior service cost 6,000 Amortization of net loss $100,000 2,000 Expected return on plan asset, 10% Actual return on plan assets, 12% Using the information provided above, the company’s pension expense would be: a. $160,000 b. $ 88,000 c. $100,000 d. $108,000 TRU Open Learning BBUS 3211 • PRACTICE EXAMINATION 6 of 13 Part B—Written Responses (70 marks total) Question 1 (12 marks) 1. On March 31, 2008, Grape Corp. sold $1,000,000 (par value) 8%, 10‐year bonds for $961,500 including accrued interest. The bonds were dated January 1, 2008. Interest is paid semi‐annually on January 1 and July 1. On April 1, 2012, Grape purchased half of the bonds on the open market at 99 plus accrued interest and retired them. The corporation uses the straight‐line method for amortization of bond premiums and discounts. a. What was the amount of the gain or loss on retirement of the bonds? b. Prepare the journal entries required on April 1, 2012 to record retirement of the bonds. Assume that interest and pre...
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This note was uploaded on 02/05/2014 for the course BUS 370 taught by Professor Andreathomas during the Spring '13 term at Capital University.

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