View the step-by-step solution to:

Chapter 14: Extra Credit Homework Opportunity (Spring 2014) Name (Print): ___________________________ 1. (1 point) On January 1, 2014, Peter Co....

1. (1 point)
On January 1, 2014, Peter Co. issued 6% bonds with a face value of $450,000 when the market interest rate was 4%.
The bonds are due in seven years and interest is payable every June 30 and December 31. The effective interest
method is used to amortize any bond premium or discount.
Required: Calculate the selling price of the bonds and indicate the associated accounts and dollar amounts to be
reported on the Income Statement for the year ended December 31, 2015, and on the December 31, 2015, Balance
Sheet. Round all amounts to the nearest dollar.
Selling Price: $_______________________
Account Name ($)
Income Statement: _______________________ ____________
Balance Sheet: _______________________ ____________
2. (1 point)
On January 1, 2014, Piper Co. issued 7% bonds with a face value of $700,000 for $671,612 when the market rate of
interest was 8%. Interest is payable on June 30 and December 31, and the effective interest method is used to
amortize the bond discount. The December 31, 2016, balance sheet of Piper Co. included the following items:
Bonds payable, due December 31, 2018 $700,000
Unamortized discount on bonds payable 12,704
On April 1, 2017, Piper retired all of the bonds at 96 plus accrued interest.
Required: Prepare the necessary journal entries for the April 1, 2017, bond retirement.
Chapter 14: Extra Credit Homework Opportunity (Spring 2014) Name (Print): ___________________________ 1. (1 point) On January 1, 2014, Peter Co. issued 6% bonds with a face value of $450,000 when the market interest rate was 4%. The bonds are due in seven years and interest is payable every June 30 and December 31. The effective interest method is used to amortize any bond premium or discount. Required: Calculate the selling price of the bonds and indicate the associated accounts and dollar amounts to be reported on the Income Statement for the year ended December 31, 2015, and on the December 31, 2015, Balance Sheet. Round all amounts to the nearest dollar. Selling Price: $ ______________________ _ Account Name ($) Income Statement: ______________________ _ ____________ Balance Sheet: _______________________ ____________ 2. (1 point) On January 1, 2014, Piper Co. issued 7% bonds with a face value of $700,000 for $671,612 when the market rate of interest was 8%. Interest is payable on June 30 and December 31, and the effective interest method is used to amortize the bond discount. The December 31, 2016, balance sheet of Piper Co. included the following items: Bonds payable, due December 31, 2018 $700,000 Unamortized discount on bonds payable 12,704 On April 1, 2017, Piper retired all of the bonds at 96 plus accrued interest. Required: Prepare the necessary journal entries for the April 1, 2017, bond retirement. NOTE: Remember to staple the paper(s) on which you did the work to this sheet. Academic Integrity Certification By signing below, I certify that while I may have legitimately worked with another student, I did not simply copy another student’s work or allow another student to simply copy my work. _________________________________ Signature
Background image of page 1
Sign up to view the entire interaction

Top Answer

Hello, This is a rounding difference. If we take the present value upto 3... View the full answer

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online