The Spongebob Company began business on January 1st 2020 They sell Pineapple homes and each home...
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The Spongebob Company began business on January 1st 2020 They sell Pineapple homes and each home comes with a 5 year warranty Spongebob sells the pineapple homes for $100,000 each and estimates warranty costs as 2% of the selling price Information for 2020 and 2021 are as follows: 2020 Sales 2021 sales REQUIRED: $2,000,000 $3,000,000 2020 amount spend on warranty repairs: $11,000 2021 amount spend on warranty repairs: $18,000 ON ITS 2020 FINANCIAL STATEMENTS WHAT DOES SPONGEBOB SHOW AS: A) WARRANTY EXPENSE B) WARRANTY LIABILITY ON ITS 2021 FINANCIAL STATEMENTS WHAT DOES SPONGEBOB SHOW AS: A) WARRANTY EXPENSE B) WARRANTY LIABILITY On January 1st 2021, Spiderman issued (sold) $100,000 (100, $1000 par bonds to Black Widow Company These 8% Spiderman 10 year bonds pay interest semi-annual (July 1 and January 1) At the time of purchase the market rate of interest is 6%. REQUIRED: A) DETERMINE THE PRICE BLACK WIDOW PAID FOR THE BONDS B) MAKE SPIDERMAN'S JOURNAL ENTRY WHEN THEY SOLD THE BONDS TO BLACK WIDOW C) MAKE SPIDERMAN'S JOURNAL ENTRY WHEN IT MAKES ITS FIRST INTEREST PAYMENT (JULY 1) D) MAKE SPIDERMAN'S ADJUSTING ENTRY ON DECEMBER 31ST 2021 e) ignore your answers to parts a through d to do part e On January 1st 2026, retired the Spiderman retired the bonds by paying $117,000. On this date, bonds had a $120,000 book value Make the journal entry Spiderman makes when it retires the bonds The Spongebob Company began business on January 1st 2020 They sell Pineapple homes and each home comes with a 5 year warranty Spongebob sells the pineapple homes for $100,000 each and estimates warranty costs as 2% of the selling price Information for 2020 and 2021 are as follows: 2020 Sales 2021 sales REQUIRED: $2,000,000 $3,000,000 2020 amount spend on warranty repairs: $11,000 2021 amount spend on warranty repairs: $18,000 ON ITS 2020 FINANCIAL STATEMENTS WHAT DOES SPONGEBOB SHOW AS: A) WARRANTY EXPENSE B) WARRANTY LIABILITY ON ITS 2021 FINANCIAL STATEMENTS WHAT DOES SPONGEBOB SHOW AS: A) WARRANTY EXPENSE B) WARRANTY LIABILITY On January 1st 2021, Spiderman issued (sold) $100,000 (100, $1000 par bonds to Black Widow Company These 8% Spiderman 10 year bonds pay interest semi-annual (July 1 and January 1) At the time of purchase the market rate of interest is 6%. REQUIRED: A) DETERMINE THE PRICE BLACK WIDOW PAID FOR THE BONDS B) MAKE SPIDERMAN'S JOURNAL ENTRY WHEN THEY SOLD THE BONDS TO BLACK WIDOW C) MAKE SPIDERMAN'S JOURNAL ENTRY WHEN IT MAKES ITS FIRST INTEREST PAYMENT (JULY 1) D) MAKE SPIDERMAN'S ADJUSTING ENTRY ON DECEMBER 31ST 2021 e) ignore your answers to parts a through d to do part e On January 1st 2026, retired the Spiderman retired the bonds by paying $117,000. On this date, bonds had a $120,000 book value Make the journal entry Spiderman makes when it retires the bonds
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Related Book For
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
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