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##### Ramsey Company issued_Bonds Payable

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Question;On the first day of;its fiscal year, Ramsey Company issued \$35,000,000 of 10-year, 9% bonds to;finance its operations. Interest is payable semiannually. The bonds were issued;at a market (effective) interest rate of 11%, resulting in Ramsey Company receiving;cash of \$30, 817,399. The company uses the interest method.;a. Journalize the;entries to record the following;1. Sale of the;bonds.;2. Prepare an;amortization table through December 31, 2014(4 interest periods for this bond;issue;3. First semiannual;interest payment, including amortization of discount. Round to the nearest;dollar.;4. Second;semiannual interest payment, including amortization of discount. Round to the;nearest dollar.;5. compute the;amount of the bond interest expense for the first year.;(B) Yates;Corporation has the following stockholders' equity accounts on Jan 1, 2012;Common Stock, \$10;par value: \$1,500,000;Paid-in Capital in;Excess of Par: 200,000;Retained Earnings;500,000;Total Stockholders;Equity: \$2,200,000;The company uses;the cost method to account for treasury stock transactions. During 2012, the;following treasury stock transactions occurred;April 1 Purchased;10,000 shares at \$18 per share.;August 1 Sold 4,000;shares at \$22 per share.;October 1 Sold;4,000 shares at \$15 per share;Instructions;(A) Journalize the;treasury stock transactions for 2012.;(B) Prepare the;Stockholders' Equity section of the balance sheet for Yates Corporation at;December 31, 2012. Assume net income was \$110,000 for 2012.;C. KT Corporation;wholesales auto parts to auto manufacturers. On march 1, 2012, Kt corporation;issued \$17,500,000 of five year, 12% bonds at market (effective) interest rate;of 10%, receiving cash of \$18,851,252. interest is payable semiannually. KT;corporation's fiscal years begins on March 1. The company uses the interest;method.;a.Journalize the;entries to record the following;1. sale of the;bonds.;2.prepare an;amortization table through 3 interest periods for this bond issue.;3. First semiannual;interest payment, including amortization of discount. Round to nearest dollar.;4.Second semiannual;interest payment, including amortization of discount. Round to nearest dollar.;5.Compute the;amount of the bond interest expense for the first year.

Paper#44655 | Written in 18-Jul-2015

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