On January 1, 2020 Beta issues 10-year, 12% bonds payablewith a par value of $400,000. The...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On January 1, 2020 Beta issues 10-year, 12% bonds payablewith a par value of $400,000. The bonds are issued at a premiumof $23,900 to yeild the current market interest rate of 11%. A nonaffiliated investor purchases the bonds from Beta. The bonds pay interest on June 30 and December 31. Both Alpha and Beta amortize the bond premium and discount using the effective interest rate. On December 31, 2020 Alpha purchases the bonds from the nonaffiliated investor for $379,155 when the bonds carrying value on Beta's books is $422,491 resulting in a gain of $43,336 on the constructive retirement of debt. Alpha's purchase price reflects the current market interest rate of 12.992186% when the bonds have 18 payments to maturity. 1. Record the equity entries made by Alpha for 2021 and 2022. 2. Do the analysis required for the Basic Elimination Entry related to this specific debt. 3. Prepare the analysis and entries required for the worksheet in 2021 and 2022. On January 1, 2020 Beta issues 10-year, 12% bonds payablewith a par value of $400,000. The bonds are issued at a premiumof $23,900 to yeild the current market interest rate of 11%. A nonaffiliated investor purchases the bonds from Beta. The bonds pay interest on June 30 and December 31. Both Alpha and Beta amortize the bond premium and discount using the effective interest rate. On December 31, 2020 Alpha purchases the bonds from the nonaffiliated investor for $379,155 when the bonds carrying value on Beta's books is $422,491 resulting in a gain of $43,336 on the constructive retirement of debt. Alpha's purchase price reflects the current market interest rate of 12.992186% when the bonds have 18 payments to maturity. 1. Record the equity entries made by Alpha for 2021 and 2022. 2. Do the analysis required for the Basic Elimination Entry related to this specific debt. 3. Prepare the analysis and entries required for the worksheet in 2021 and 2022.
Expert Answer:
Answer rating: 100% (QA)
1 Record the equity entries made by Alpha for 2021 and 2022 The following equity entries would be ma... View the full answer
Related Book For
Fundamental Accounting Principles
ISBN: 978-0077862275
22nd edition
Authors: John Wild, Ken Shaw, Barbara Chiappetta
Posted Date:
Students also viewed these accounting questions
-
On January 1, a company issued and sold a $398,000, 6%, 10-year bond payable, and received proceeds of $393,000. Interest is payable each June 30 and December 31. The company uses the straight-line...
-
Consider the function, x4-2x3-4x + 4x + 4 for. -1sx50. Applying the Bisection method on the given interval, p3= O-0.6550 O-0.6250 -0.500 -0.7500 -0.3750
-
On January 1, 2004, Chain Corporation issued S5 million of 7% coupon bonds at par. The bonds mature in 20 years and pay interest semiannually on June 30 and December 31 of each year. On December 31,...
-
Narrowly defining public stock companies in terms of financial performance can lead to Blank______. improved public relations more accurate accounting black swan events more efficient production
-
Graph the curve x = 2 cos cos 2 y = 2 sin sin 2. If this curve is rotated about the -axis, find the area of the resulting surface. (Use your graph to help find the correct parameter interval.)
-
Three displacements are A = 200 m, due south; B = 250 m, due west; C = 150 m, 30.0 east of north. Construct a separate diagram for each of the following possible ways of adding these vectors: R1 = A...
-
Williams & Associates, Inc., completed the following transactions during October 2010, its first month of operations: Requirement 1. Using the steps outlined in the five-step transaction analysis,...
-
Full Disclosure Principle Presented below are a number of facts related to Weller, Inc. Assume that no mention of these facts was made in the financial statements and the related notes. Instructions...
-
Question 1 of 3 | Page 1 of 3 In its first year of operations, Snake Corporation had the following transactions relating to its convertible preferred shares and common shares. The preferred dividend...
-
Based on Exhibits 1 and 2, the effective duration for the AI bond is closest to: A. 1.98. B. 2.15. C. 2.73. Jules Bianchi is a bond analyst for Maneval Investments, Inc. Bianchi gathers data on three...
-
A manufacturing firm purchased a heavy duty drilling machine. They were given two payment options: Option 1: Make a payment of $47,500 immediately to settle the invoice for the machine. Option 2:...
-
Chose a health care function to evaluate for efficiency and effectiveness of delivery. You will apply Lean Six Sigma principles by using the DMAIC methodology to present how errors and waste can be...
-
Presented below are selected transactions of Kingbird Company. Kingbird sells in large quantities to other companies and also sell product in a small retail outlet. March 1 Sold merchandise on...
-
Use conservation of energy to solve the following problems. Your final conservation of energy equation must be shown. 3.) A ball starts at the top of a slide at point A with an initial velocity of...
-
The company's consolidated statement of income is provided below: (in millions of dollars) Revenues Sales by company-operated restaurant stores Revenue from franchised stores Total revenues Years...
-
Explain, consisting of a minimum of 200 words, on the significance of Operations Specifications for air carriers. Share your perspective on the potential consequences if airlines were not required to...
-
Consider how a particular Innovation will re shape an industry, profession and/or organization of interest to you. Discuss how the industry/profession/organization will be reshaped based on an...
-
How many years will it take a $700 balance to grow into $900 in an account earning 5%?
-
Bill Padley expects to invest $10,000 for 25 years, after which he wants to receive $108,347. What rate of interest must Padley earn?
-
Manufacturers such as Apple and Google usually work to maintain a high-quality and low-cost operation. One ratio routinely computed for this assessment is the cost of goods sold divided by total...
-
Refer to Apples financial statements in Appendix A and compute its cost of goods available for sale for the year ended September 28, 2013.
-
The inversion point of a gas can be mathematically expressed as (a) \(T_{i}=\frac{2 a b}{R}\) (b) \(T_{i}=\frac{2 b}{R a}\) (c) \(T_{i}=\frac{2 a}{R b}\) (d) None of these.
-
Residual free energy is defined as (a) \(G^{R}=G-G^{\mathrm{ig}}\) (b) \(G^{R}=G^{\mathrm{ig}}-G\) (c) \(G^{R}=G+G^{\mathrm{ig}}\) (d) None of these.
-
Departure functions are useful to calculate the thermodynamic property of real fluids (a) When the \(P-V-T\) data of the substance is unavailable (b) When the \(P-V-T\) data of the substance is...
Study smarter with the SolutionInn App