Three Independent situations follow: 1. Day One Ltd. (DOL) issued $10,000,000 in stripped (zero-coupon) bonds that mature
Fantastic news! We've Found the answer you've been seeking!
Question:
Three Independent situations follow:
Transcribed Image Text:
1. Day One Ltd. (DOL) issued $10,000,000 in stripped (zero-coupon) bonds that mature in 6 years. The market rate of interest for bonds of a similar nature is 1.2% compounded monthly. Five and one-half years after issue, when the market rate was 3.6%, DOL repurchased $4,000,000 of the bonds on the open market. DOL accrues interest monthly. Bonds are carried at amortized cost. 2. Sums Up Accountants sold $9,000,000 of five-year bonds that pay the then-current market rate of interest of 9% annually on December 31. The bonds are dated January 1, 2018, but were not issued until February 1, 2018. Sums Up's year-end is December 31. Sums Up has adopted a policy of crediting interest expense for the interest accrued up to the date of sale. 3. On January 1, 2020, The Nutty Professor Corp. (TNPC) sold $6,000,000 of three-year, 10% bonds priced to yield 8%. Interest is payable on June 30 and December 31 each year. 1. Day One Ltd. (DOL) issued $10,000,000 in stripped (zero-coupon) bonds that mature in 6 years. The market rate of interest for bonds of a similar nature is 1.2% compounded monthly. Five and one-half years after issue, when the market rate was 3.6%, DOL repurchased $4,000,000 of the bonds on the open market. DOL accrues interest monthly. Bonds are carried at amortized cost. 2. Sums Up Accountants sold $9,000,000 of five-year bonds that pay the then-current market rate of interest of 9% annually on December 31. The bonds are dated January 1, 2018, but were not issued until February 1, 2018. Sums Up's year-end is December 31. Sums Up has adopted a policy of crediting interest expense for the interest accrued up to the date of sale. 3. On January 1, 2020, The Nutty Professor Corp. (TNPC) sold $6,000,000 of three-year, 10% bonds priced to yield 8%. Interest is payable on June 30 and December 31 each year.
Expert Answer:
Answer rating: 100% (QA)
a i The Nutty Professor Corp Journal Entry Date Accounts Debit Credit 112020 Cash 6000000 Bonds Paya... View the full answer
Related Book For
Auditing and Assurance services an integrated approach
ISBN: 978-0132575959
14th Edition
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley
Posted Date:
Students also viewed these accounting questions
-
Assume that the Special Contract Division of Smith experienced the following transactions during the year ended December 31, 2020. i (Click the icon to view the transactions.) Requirements 1. Prepare...
-
Determine the missing amounts. (Assume all beginning balances are $0 and that material costs are recorded before labor costs.) Raw Materials Inventory Work-in-Process Inventory Finished Goods...
-
Prepare Capitol Hill Corporation's statement of cash flows for the year ended June 30, 2024. Use the direct method. (Use a minus sign or parentheses for amounts that result in a decrease in cash. If...
-
Explain incremental cash flow, externality? Why is timing of cash flows important? What is scenario analysis? Would a project's NPV for a firm be higher or lower if the firm used accelerated rather...
-
1. On what basis did Oiler lose his case? 2. Assume that this case was appealed and that the appeals court agreed with Judge Africk. Write a dissenting opinion.
-
When examining documentation supporting costs and expenses, an auditor must consider its availability and its reliability. Discuss the reliability and adequacy of documentation you would expect for...
-
Singh Enterprises has an accounting year to 31 December and uses the straight-line method of depreciation. On 1 January 2006 the business bought a machine for 10,000. The machine had an expected...
-
Two power plants are currently emitting 8,000 tons of pollution each (for a total of 16,000 tons) in City A. Marginal pollution reduction costs for Plant 1 are given by MCR 1 = 0.02 Q 1 and for Plant...
-
How does advanced computational fluid dynamics (CFD) analysis contribute to the design optimization of complex hydraulic structures such as spillways, weirs, and stormwater management systems,...
-
Adjustment data for SLO Health Care Inc. for January are as follows: 1. Insurance expired, $450. 2. Supplies on hand on January 31, $600. 3. Depreciation on building, $1,150. 4. Unearned rent revenue...
-
You are working on the surgical floor and will be receiving a patient from the postanesthetic care unit. The nurse calls and gives the following report: C.P. is a 55-year-old woman who underwent a...
-
Are there any conflicts that might arise between the issuer and the investment banker when setting the offering price on a securities issue?
-
Return to Figure 9.2. Suppose P 0 is $10 and P 1 is $11. Suppose a new firm with the same LRAC curve as the incumbent tries to break into the market by selling 4,000 units of output. Estimate from...
-
What is a margin requirement?
-
What are two ratios that measure market value for publicly traded investor-owned businesses?
-
What are the differences between shares that Tenet Healthcare sells in the primary market and its shares being sold in the secondary market?
-
The economy of a small island nation is based on two sectors, coal and steel. Production of a dollar's worth of coal requires an input of $0.39 from coal and $0.44 from steel. Production of a...
-
A statistical study shows that the fraction of television sets of a certain brand that are still in service after x years is given by f (x) = e-0.15x. (a) What fraction of the sets are still in...
-
Describe the purpose of corporate codes of conduct and identify three examples of items addressed in a typical code of conduct.
-
How does the auditor read and evaluate information that is available only in machine-readable form?
-
For each of the following misstatements in property, plant, and equipment accounts, state an internal control that the client can implement to prevent the misstatement from occurring and a...
-
Solve Problem 8.73 using the Rayleigh-Ritz method with the mode shape \[U(x)=c_{1} \sin \frac{\pi x}{2 l}+c_{2} \sin \frac{3 \pi x}{2 l}\]
-
Using Program \(12 . \mathrm{m}\), solve Example 8.4. Data From Example 8.4:- Find the natural frequencies of a bar with one end fixed and a mass attached at the other end, as in Fig. 8.9.
-
Using MATLAB, plot the dynamic response of the plucked string, Eq. (E.6) of Example 8.1, at \(x=l / 2\). Data: \(h=0.1 \mathrm{~m}, l=1.0 \mathrm{~m}, c=100 \mathrm{~m} / \mathrm{s}\). Data From...
Study smarter with the SolutionInn App