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Bonds Payable_Issue and Redemption_Eight questions

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Question;Q QS 14-1 Bond features and;terminology L.O. A2;Select;the phrase that best fits each term of the description A through H.;Description;Items;A.;Records and tracks the bondholders' names.;B. Is;unsecured, backed only by the issuer's credit standing.;C. Has;varying maturity dates for amounts owed.;D.;Identifies rights and responsibilities of the issuer and the bondholders.;E. Can;be exchanged for shares of the issuer's stock.;F. Is;unregistered, interest is paid to whoever possesses them.;G.;Maintains a separate asset account from which bondholders are paid at maturity.;H.;Pledges specific assets of the issuer as collateral.;QS;14-2 Bond computations-straight-line L.O. P1, P2;Alberto;Company issues 8%, 10-year bonds with a par value of $350,000 and semiannual;interest payments. On the issue date, the annual market rate for these bonds is;10%, which implies a selling price of 87?. The straight-line method is used to;allocate interest expense.;1.;What;are the issuer?s cash proceeds from issuance of these bonds? (Omit the;$" sign in your response.);Cash;proceeds $;2.;What;total amount of bond interest expense will be recognized over the life of these;bonds? (Omit the "$" sign in your response.);Total;bond interest expense $;3.;What;is the amount of bond interest expense recorded on the first interest payment;date? (Round your answer to the nearest dollar amount. Omit the "$;sign in your response.);Bond;interest expense $;QS;14-3B Bond computations-effective interest L.O. P1, P3;Sanchez;Company issues 10%, 15-year bonds with a par value of $120,000 and semiannual;interest payments. On the issue date, the annual market rate for these bonds is;8%, which implies a selling price of 117?. The effective interest method is;used to allocate interest expense.;1.;What;are the issuer?s cash proceeds from issuance of these bonds? (Omit the;$" sign in your response.);Cash proceeds;$;2.;What;total amount of bond interest expense will be recognized over the life of these;bonds? (Omit the "$" sign in your response.);Total;bond interest expense $;3.;What;amount of bond interest expense is recorded on the first interest payment date?;(Omit the "$" sign in your response.);Bond;interest expense $;eBook;Links (2) references;QS;14-4 Journalize bond issuance L.O.P1;Prepare;the journal entries for the issuance of the bonds. Assume that both bonds are;issued for cash on January 1, 2011.;1.;Alberto;Company issues 8%, 10-year bonds with a par value of $350,000 and semiannual;interest payments. On the issue date, the annual market rate for these bonds is;10%, which implies a selling price of 87?. The straight-line method is used to;allocate interest expense. (Omit the "$" sign in your response.);Date;General Journal Debit Credit;Jan.;1, 2011;2.;Sanchez;Company issues 10%, 15-year bonds with a par value of $120,000 and semiannual;interest payments. On the issue date, the annual market rate for these bonds is;8%, which implies a selling price of 117?. The effective interest method is;used to allocate interest expense. (Omit the "$" sign in your;response.);Date;General Journal Debit Credit;Jan.;1, 2011;QS 14-6 Recording bond;issuance and discount amortization L.O. P1, P2;Bellvue;Company issues 10%, five-year bonds, on December 31, 2010, with a par value of;$100,000 and semiannual interest payments.;Semiannual;Period-End Unamortized Discount Carrying Value;(0);12/31/2010 $ 7,360 $ 92,640;(1);6/30/2011 6,624 93,376;(2);12/31/2011 5,888 94,112;Use;the above straight-line bond amortization table and prepare journal entries to;record the following.;(a);The;issuance of bonds on December 31, 2010. (Omit the "$" sign in your;response.);Date;General Journal Debit Credit;Dec.;31;(b);The;first interest payment on June 30, 2011. (Omit the "$" sign in your;response.);Date;General Journal Debit Credit;June;30;(c);The second interest payment on December 31, 2011. (Omit the "$" sign;in your response.);Date;General Journal Debit Credit;Dec.;31;QS;14-7 Bond retirement by call option L.O. P4;On;July 1, 2011, Jackson Company exercises a $5,000 call option (plus par value);on its outstanding bonds that have a carrying value of $208,000 and par value;of $200,000. The company exercises the call option after the semiannual;interest is paid on June 30, 2011.;Record;the entry to retire the bonds. (Omit the "$" sign in your response.);Date;General Journal Debit Credit;July;1, 2011;QS;14-12D Recording operating leases L.O. C4;Lauren;Wright, an employee of ETrain.com, leases a car at O?Hare airport for a;three-day business trip. The rental cost is $350. Prepare the entry by;ETrain.com to record Lauren?s short-term car lease cost. (Omit the;$" sign in your response.);General;Journal Debit Credit;QS;14-13D Recording capital leases L.O. C4;Juicyfruit;Inc., signs a five-year lease for office equipment with Office Solutions. The;present value of the lease payments is $20,859. Prepare the journal entry that;Juicyfruit records at the inception of this capital lease. (Omit the;$" sign in your response.);General;Journal Debit Credit

 

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