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Feller Company issues $20,000,000 of 10-year, 9% b...

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Feller Company issues $20,000,000 of 10-year, 9% bonds on March 1, 2010 at 97 plus accrued interest. The bonds are dated January 1, 2010, and pay interest on June 30 and December 31. What is the total cash received on the issue date? a. $19,400,000 b. $20,450,000 c. $19,700,000 d. $19,100,000 Farmer Company issues $10,000,000 of 10-year, 9% bonds on March 1, 2010 at 97 plus accrued interest. The bonds are dated January 1, 2010, and pay interest on June 30 and December 31. What is the total cash received on the issue date? a. $9,700,000 b. $10,225,000 c. $9,850,000 d. $9,550,000 A company issues $20,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2009. Interest is paid on June 30 and December 31. The proceeds from the bonds are $19,604,145. Using straight-line amortization, what is the carrying value of the bonds on December 31, 2011? a. $19,670,231 b. $19,940,622 c. $19,633,834 d. $19,663,523 At December 31, 2010 the following balances existed on the books of Foxworth Corporation: Bonds Payable $2,000,000 Discount on Bonds Payable 160,000 Interest Payable 50,000 Unamortized Bond Issue Costs 120,000 83. 84. 85. 86. 87. Long-Term Liabilities 14 - 19 If the bonds are retired on January 1, 2011, at 102, what will Foxworth report as a loss on redemption? a. $370,000 b. $320,000 c. $270,000 d. $200,000 88. At December 31, 2010 the following balances existed on the books of Rentro Corporation: Bonds Payable $1,500,000 Discount on Bonds Payable 120,000 Interest Payable 37,000 Unamortized Bond Issue Costs 90,000 If the bonds are retired on January 1, 2011, at 102, what will Rentro report as a loss on redemption? a. $150,000 b. $202,500 c. $240,000 d. $277,500 The December 31, 2010, balance sheet of Hess Corporation includes the following items: 9% bonds payable due December 31, 2019 Unamortized premium on bonds payable $1,000,000 27,000 The bonds were issued on December 31, 2009, at 103, with interest payable on July 1 and December 31 of each year. Hess uses straight-line amortization. On March 1, 2011, Hess retired $400,000 of these bonds at 98 plus accrued interest. What should Hess record as a gain on retirement of these bonds? Ignore taxes. a. $18,800. b. $10,800. c. $18,600. d. $20,000. On January 1, 2004, Hernandez Corporation issued $4,500,000 of 10% ten-year bonds at 103. The bonds are callable at the option of Hernandez at 105. Hernandez has recorded amortization of the bond premium on the straight-line method (which was not materially different from the effective-interest method). On December 31, 2010, when the fair market value of the bonds was 96, Hernandez repurchased $1,000,000 of the bonds in the open market at 96. Hernandez has recorded interest and amortization for 2010. Ignoring income taxes and assuming that the gain is material, Hernandez should report this reacquisition as a. a loss of $49,000. b. a gain of $49,000. c. a loss of $61,000. d. a gain of $61,000. The 10% bonds payable of Nixon Company had a net carrying amount of $570,000 on December 31, 2010. The bonds, which had a face value of $600,000, were issued at a discount to yield 12%. The amortization of the bond discount was recorded under the effective-interest method. Interest was paid on January 1 and July 1 of each year. On July 2, 2011, several years before their maturity, Nixon retired the bonds at 102. The interest payment on July 1, 2011 was made as scheduled. What is the loss that Nixon should record on the early retirement of the bonds on July 2, 2011? Ignore taxes. a. $12,000. b. $37,800. c. $33,600. d. $42,000. A corporation called an outstanding bond obligation four years before maturity. At that time there was an unamortized discount of $300,000. To extinguish this debt, the company had to pay a call premium of $100,000. Ignoring income tax considerations, how should these amounts be treated for accounting purposes? a. Amortize $400,000 over four years. b. Charge $400,000 to a loss in the year of extinguishment. c. Charge $100,000 to a loss in the year of extinguishment and amortize $300,000 over four years. d. Either amortize $400,000 over four years or charge $400,000 to a loss immediately, whichever management selects,please provide good explanations for the questions. I do not understand the straight line method of bond amortization and extinguishment of debt. If you do a good job, I will use your service again.,"Feller Company issues $20,000,000 of 10-year, 9% bonds on March 1, 2010 at 97 plus accrued interest. The bonds are dated January 1, 2010, and pay interest on June 30 and December 31. What is the total cash received on the issue date? a. $19,400,000 b. $20,450,000 c. $19,700,000 d. $19,100,000 Farmer Company issues $10,000,000 of 10-year, 9% bonds on March 1, 2010 at 97 plus accrued interest. The bonds are dated January 1, 2010, and pay interest on June 30 and December 31. What is the total cash received on the issue date? a. $9,700,000 b. $10,225,000 c. $9,850,000 d. $9,550,000 I figured out these two problems .. don't worry about working on them. Where is your message to me?,thanks. how long will it take? I took the first two problems off.,Michael, Hi! I just figured this one out: A company issues $20,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2009. Interest is paid on June 30 and December 31. The proceeds from the bonds are $19,604,145. Using straight-line amortization, what is the carrying value of the bonds on December 31, 2011? a. $19,670,231 b. $19,940,622 c. $19,633,834 d. $19,663,523 But I may have more problems to add to my list for you to solve. Denise,did you solve a problem? i do not see any answers. dc,Yes. I know these are real tough problems.,Here are some additional problems. 93. The 12% bonds payable of Nyman Co. had a carrying amount of $832,000 on December 31, 2010. The bonds, which had a face value of $800,000, were issued at a premium to yield 10%. Nyman uses the effective-interest method of amortization. Interest is paid on June 30 and December 31. On June 30, 2011, several years before their maturity, Nyman retired the bonds at 104 plus accrued interest. The loss on retirement, ignoring taxes, is a. $0. b. $6,400. c. $9,920. d. $32,000. Answer is B I just dont know how to solve this. Denise 94. Didde Company issues $10,000,000 face value of bonds at 96 on January 1, 2009. The bonds are dated January 1, 2009, pay interest semiannually at 8% on June 30 and December 31, and mature in 10 years. Straight-line amortization is used for discounts and premiums. On September 1, 2012, $6,000,000 of the bonds are called at 102 plus accrued interest. What gain or loss would be recognized on the called bonds on September 1, 2012? a. $600,000 loss b. $272,000 loss c. $360,000 loss d. $453,333 loss Answer is B I just dont know how to solve this. Denise 95. Cortez Company issues $5,000,000 face value of bonds at 96 on January 1, 2009. The bonds are dated January 1, 2009, pay interest semiannually at 8% on June 30 and December 31, and mature in 10 years. Straight-line amortization is used for discounts and premiums. On September 1, 2012, $3,000,000 of the bonds are called at 102 plus accrued interest. What gain or loss would be recognized on the called bonds on September 1, 2012? a. $300,000 loss b. $136,000 loss c. $180,000 loss d. $226,667 loss Answer is B I just dont know how to solve this. Denise 96. On January 1, 2010, Ann Price loaned $45,078 to Joe Kiger. A zero-interest-bearing note (face amount, $60,000) was exchanged solely for cash; no other rights or privileges were exchanged. The note is to be repaid on December 31, 2012. The prevailing rate of interest for a loan of this type is 10%. The present value of $60,000 at 10% for three years is $45,078. What amount of interest income should Ms. Price recognize in 2010? a. $4,508. b. $6,000. c. $18,000. d. $13,524. Answer is A I just dont know how to solve this. Denise 97. On January 1, 2010, Jacobs Company sold property to Dains Company which originally cost Jacobs $760,000. There was no established exchange price for this property. Danis gave Jacobs a $1,200,000 zero-interest-bearing note payable in three equal annual installments of $400,000 with the first payment due December 31, 2010. The note has no ready market. The prevailing rate of interest for a note of this type is 10%. The present value of a $1,200,000 note payable in three equal annual installments of $400,000 at a 10% rate of interest is $994,800. What is the amount of interest income that should be recognized by Jacobs in 2010, using the effective-interest method? a. $0. b. $40,000. c. $99,480. d. $120,000. Answer is c I just dont know how to solve this. Denise 98. On January 1, 2010, Crown Company sold property to Leary Company. There was no established exchange price for the property, and Leary gave Crown a $2,000,000 zero-interest-bearing note payable in 5 equal annual installments of $400,000, with the first payment due December 31, 2010. The prevailing rate of interest for a note of this type is 9%. The present value of the note at 9% was $1,442,000 at January 1, 2010. What should be the balance of the Discount on Notes Payable account on the books of Leary at December 31, 2010 after adjusting entries are made, assuming that the effective-interest method is used? a. $0 b. $428,220 c. $446,400 d. $558,000 Answer is B I just dont know how to solve this. Denise,At December 31, 2010 the following balances existed on the books of Foxworth Corporation: Bonds Payable $2,000,000 Discount on Bonds Payable 160,000 Interest Payable 50,000 Unamortized Bond Issue Costs 120,000 83. 84. 85. 86. 87. Long-Term Liabilities 14 - 19 If the bonds are retired on January 1, 2011, at 102, what will Foxworth report as a loss on redemption? a. $370,000 b. $320,000 c. $270,000 d. $200,000 This answer is B if that helps, I just need help solving. 88. At December 31, 2010 the following balances existed on the books of Rentro Corporation: Bonds Payable $1,500,000 Discount on Bonds Payable 120,000 Interest Payable 37,000 Unamortized Bond Issue Costs 90,000 If the bonds are retired on January 1, 2011, at 102, what will Rentro report as a loss on redemption? a. $150,000 b. $202,500 c. $240,000 d. $277,500 this answer is C, but how to arrive? 89. The December 31, 2010, balance sheet of Hess Corporation includes the following items: 9% bonds payable due December 31, 2019 $1,000,000 Unamortized premium on bonds payable 27,000 The bonds were issued on December 31, 2009, at 103, with interest payable on July 1 and December 31 of each year. Hess uses straight-line amortization. On March 1, 2011, Hess retired $400,000 of these bonds at 98 plus accrued interest. What should Hess record as a gain on retirement of these bonds? Ignore taxes. a. $18,800. b. $10,800. c. $18,600. d. $20,000. This answer is C 90. On January 1, 2004, Hernandez Corporation issued $4,500,000 of 10% ten-year bonds at 103. The bonds are callable at the option of Hernandez at 105. Hernandez has recorded amortization of the bond premium on the straight-line method (which was not materially different from the effective-interest method). On December 31, 2010, when the fair market value of the bonds was 96, Hernandez repurchased $1,000,000 of the bonds in the open market at 96. Hernandez has recorded interest and amortization for 2010. Ignoring income taxes and assuming that the gain is material, Hernandez should report this reacquisition as a. a loss of $49,000. b. a gain of $49,000. c. a loss of $61,000. d. a gain of $61,000. This answer is B 91. The 10% bonds payable of Nixon Company had a net carrying amount of $570,000 on December 31, 2010. The bonds, which had a face value of $600,000, were issued at a discount to yield 12%. The amortization of the bond discount was recorded under the effective-interest method. Interest was paid on January 1 and July 1 of each year. On July 2, 2011, several years before their maturity, Nixon retired the bonds at 102. The interest payment on July 1, 2011 was made as scheduled. What is the loss that Nixon should record on the early retirement of the bonds on July 2, 2011? Ignore taxes. a. $12,000. b. $37,800. c. $33,600. d. $42,000. B 92. A corporation called an outstanding bond obligation four years before maturity. At that time there was an unamortized discount of $300,000. To extinguish this debt, the company had to pay a call premium of $100,000. Ignoring income tax considerations, how should these amounts be treated for accounting purposes? a. Amortize $400,000 over four years. b. Charge $400,000 to a loss in the year of extinguishment. c. Charge $100,000 to a loss in the year of extinguishment and amortize $300,000 over four years. d. Either amortize $400,000 over four years or charge $400,000 to a loss immediately, whichever management selects. B I didn't know if you had the answers or not. Denise,how do I send them as a new post?

 

Paper#6596 | Written in 18-Jul-2015

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