Jayroe Company was started when it issued bonds with $300,000 face value on January 1, 2013. The
Question:
Jayroe Company was started when it issued bonds with $300,000 face value on January 1, 2013. The bonds were issued for cash at 103. They had a 15-year term to maturity and an 6 percent annual interest rate. Interest was payable annually. Jayroe immediately purchased land with the proceeds (cash received) from the bond issue. Jayroe leased the land for $36,000 cash per year. On January 1, 2016, the company sold the land for $310,000 cash. Immediately after the sale, Jayroe repurchased its bonds (repaid the bond liability) at 104. Assume that no other accounting events occurred in 2016.
Required
Prepare an income statement, statement of changes in equity, balance sheet and statement of cash flows for each of the 2013, 2014, 2015, and 2016 accounting periods. Assume that the company closes its books on December 31 of each year. Prepare the statements using a vertical statements format.
Balance SheetBalance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
Step by Step Answer:
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward