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ACC Exercises E10-6, E10-8, & E10-18 and Problems 10-3A & 10-6A

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Question;E10-6 According to the accountant of Ulner Inc., its payroll taxes for the week were as follows:$198.40 for FICA taxes, $19.84 for federal unemployment taxes, and $133.92 for stateunemployment taxes.InstructionsJournalize the entry to record the accrual of the payroll taxes.E10-8 Jim Thome has prepared the following list of statements about bonds.1. Bonds are a form of interest-bearing notes payable.2. When seeking long-term financing, an advantage of issuing bonds over issuing commonstock is that stockholder control is not affected.3. When seeking long-term financing, an advantage of issuing common stock over issuingbonds is that tax savings result.4. Secured bonds have specific assets of the issuer pledged as collateral for the bonds.5. Secured bonds are also known as debenture bonds.6. Bonds that mature in installments are called term bonds.7. A conversion feature may be added to bonds to make them more attractive to bond buyers.8. The rate used to determine the amount of cash interest the borrower pays is called the stated rate.9. Bond prices are usually quoted as a percentage of the face value of the bond.10. The present value of a bond is the value at which it should sell in the marketplace.InstructionsIdentify each statement above as true or false. If false, indicate how to correct the statement.*P10-6A On July 1, 2011, Atwater Corporation issued $2,000,000 face value, 10%, 10-yearbonds at $2,271,813.This price resulted in an effective-interest rate of 8% on the bonds. Atwateruses the effective-interest method to amortize bond premium or discount. The bonds pay semiannualinterest July 1 and January 1.Instructions(Round all computations to the nearest dollar.)(a) Prepare the journal entry to record the issuance of the bonds on July 1, 2011.(b) Prepare an amortization table through December 31, 2012 (3 interest periods) for this bondissue.(c) Prepare the journal entry to record the accrual of interest and the amortization of the premiumon December 31, 2011.(d) Prepare the journal entry to record the payment of interest and the amortization of thepremium on July 1, 2012, assuming no accrual of interest on June 30.(e) Prepare the journal entry to recordE10-18 Hrabik Corporation issued $600,000, 9%, 10-year bonds on January 1, 2011, for$562,613.This price resulted in an effective-interest rate of 10% on the bonds. Interest is payablesemiannually on July 1 and January 1. Hrabik uses the effective-interest method to amortizebond premium or discount.InstructionsPrepare the journal entries to record the following. (Round to the nearest dollar.)(a) The issuance of the bonds.(b) The payment of interest and the discount amortization on July 1, 2011, assuming that interestwas not accrued on June 30.(c) The accrual of interest and the discount amortization on December 31, 2011.On May 1, 2011, Newby Corp. issued $600,000, 9%, 5-year bonds at face value. Thebonds were dated May 1, 2011, and pay interest semiannually on May 1 and November 1.Financial statements are prepared annually on December 31.Instructions(a) Prepare the journal entry to record the issuance of the bonds.(b) Prepare the adjusting entry to record the accrual of interest on December 31, 2011.(c) Show the balance sheet presentation on December 31, 2011.(d) Prepare the journal entry to record payment of interest on May 1, 2012, assuming no accrualof interest from January 1, 2012, to May 1, 2012.e) Prepare the journal entry to record payment of interest on November 1, 2012.(f) Assume that on November 1, 2012, Newby calls the bonds at 102. Record the redemption ofthe bonds.ustomer replied 371 days and 17 hours ago.These are the assignments that I need assistance with completing,E10-6 According to the accountant of Ulner Inc., its payroll taxes for the week were as follows: $198.40 for FICA taxes, $19.84 for federal unemployment taxes, and $133.92 for state unemployment taxes.Instructions Journalize the entry to record the accrual of the payroll taxes.E10-8 Jim Thome has prepared the following list of statements about bonds.Instructions Identify each statement above as true or false. If false, indicate how to correct the statement.E10-18 Hrabik Corporation issued $600,000, 9%, 10-year bonds on January 1, 2011, for $562,613.This price resulted in an effective-interest rate of 10% on the bonds. Interest is payable semiannually on July 1 and January 1. Hrabik uses the effective-interest method to amortize bond premium or discount.Instructions Prepare the journal entries to record the following. (Round to the nearest dollar.) (a) The issuance of the bonds. (b) The payment of interest and the discount amortization on July 1, 2011, assuming that interest was not accrued on June 30. (c) The accrual of interest and the discount amortization on December 31, 2011.P10-3A On May 1, 2011, Newby Corp. issued $600,000, 9%, 5-year bonds at face value. The bonds were dated May 1, 2011, and pay interest semiannually on May 1 and November 1. Financial statements are prepared annually on December 31.Instructions (a) Prepare the journal entry to record the issuance of the bonds. (b) Prepare the adjusting entry to record the accrual of interest on December 31, 2011. (c) Show the balance sheet presentation on December 31, 2011. (d) Prepare the journal entry to record payment of interest on May 1, 2012, assuming no accrual of interest from January 1, 2012, to May 1, 2012. (e) Prepare the journal entry to record payment of interest on November 1, 2012. (f) Assume that on November 1, 2012, Newby calls the bonds at 102. Record the redemption of the bonds.P10-6A On July 1, 2011, Atwater Corporation issued $2,000,000 face value, 10%, 10-year bonds at $2,271,813.This price resulted in an effective-interest rate of 8% on the bonds. Atwater uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest July 1 and January 1.Instructions (Round all computations to the nearest dollar.) (a) Prepare the journal entry to record the issuance of the bonds on July 1, 2011. (b) Prepare an amortization table through December 31, 2012 (3 interest periods) for this bond issue. (c) Prepare the journal entry to record the accrual of interest and the amortization of the premium on December 31, 2011. (d) Prepare the journal entry to record the payment of interest and the amortization of the premium on July 1, 2012, assuming no accrual of interest on June 30. (e) Prepare the journal entry to record the accrual of interest and the amortization of the premium on December 31, 2012.Expert: KellyV2012 replied 371 days and 13 hours ago.E10-6: According to the accountant of Ulner Inc., its payroll taxes for the week were as follows: $198.40 for FICA taxes, $19.84 for federal unemployment taxes, and $133.92 for state unemployment taxes.Instructions: Journalize the entry to record the accrual of the payroll taxes.Payroll Taxes Expense - $352.16FICA Tax Payable - $198.40Federal Unemployment Tax Payable - $19.84State Unemployment Tax Payable - $133.92E10-8: Jim Thome has prepared the following list of statements about bonds.E10-18: Hrabik Corporation issued $600,000, 9%, 10-year bonds on January 1, 2011, for $562,613.This price resulted in an effective-interest rate of 10% on the bonds. Interest is payable semiannually on July 1 and January 1. Hrabik uses the effective-interest method to amortize bond premium or discount.(a) The issuance of the bonds.Cash - $562,613Discount on Bonds Payable - $37,387Bonds Payable - $600,000(b) The payment of interest and the discount amortization on July 1, 2011, assuming that interest was not accrued on June 30.Interest Expense ($562,613*5%) - $28,131Discount on Bonds Payable - $1,131Cash ($600*9%*6/12) - $27,000(c) The accrual of interest and the discount amortization on December 31, 2011.Interest Expense {($562,613+1,131)*5%} - $57,738Discount on Bonds Payable - $1,187Cash ($600*9%*1) - $2700P10-3A: On May 1, 2011, Newby Corp. issued $600,000, 9%, 5-year bonds at face value. The bonds were dated May 1, 2011 and pay interest semiannually on May 1 and November 1. Financial statements are prepared annually on December 31.(a) Prepare the journal entry to record the issuance of the bonds.Cash - $600,000Bonds Payable - $600,000(b) Prepare the adjusting entry to record the accrual of interest on December 31, 2011.Interest Expense ($600k*9%*2/12) - $9,000Interest Payable - $9,000(c) Show the balance sheet presentation on December 31, 2011.Current Liabilities:Bond Interest Payable - $9,000Long -Term Liabilities:Bonds Payable (Due on 2016) - $600,000(d) Prepare the journal entry to record payment of interest on May 1, 2012, assuming no accrual of interest from January 1, 2012, to May 1, 2012.Interest Expense ($600k*9%*4/12) - $18,000Interest Payable - $9,000Cash - $27,000(e) Prepare the journal entry to record payment of interest on November 1, 2012.Interest Expense ($600k*9%*6/12) - $27,000Cash - $27,000(f) Assume that on November 1, 2012, Newby calls the bonds at 102. Record the redemption of the bonds.Bonds Payable - $600,000Loss on Bond Redemption - $12,000Cash ($600k*102%) - $612,000P10-6A: On July 1, 2011, Atwater Corporation issued $2,000,000 face value, 10%, 10-year bonds at $2,271,813.This price resulted in an effective-interest rate of 8% on the bonds. Atwater uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest July 1 and January 1.(a) Prepare the journal entry to record the issuance of the bonds on July 1, 2011.Cash - $2,271,813Bonds Payable - $2,000,000Premium on Bonds Payable - $271,813

 

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