New Semester
Started
Get
50% OFF
Study Help!
--h --m --s
Claim Now
Question Answers
Textbooks
Find textbooks, questions and answers
Oops, something went wrong!
Change your search query and then try again
S
Books
FREE
Study Help
Expert Questions
Accounting
General Management
Mathematics
Finance
Organizational Behaviour
Law
Physics
Operating System
Management Leadership
Sociology
Programming
Marketing
Database
Computer Network
Economics
Textbooks Solutions
Accounting
Managerial Accounting
Management Leadership
Cost Accounting
Statistics
Business Law
Corporate Finance
Finance
Economics
Auditing
Tutors
Online Tutors
Find a Tutor
Hire a Tutor
Become a Tutor
AI Tutor
AI Study Planner
NEW
Sell Books
Search
Search
Sign In
Register
study help
business
accounting
Cornerstones of Financial and Managerial Accounting 1st Edition Rich Jones, Mowen, Hansen, Heitger - Solutions
Bordewick Company borrowed $120,000 on a seven-month, 9 percent, interest-bearing note on October 1, 2009. Bordewick ends its fiscal year on December 31. The note was paid with interest on April 30, 2010.Required:1. Prepare the entry for this note on October 1, 2009.2. Prepare the adjusting entry
Monte Cristo Products owed $100,000 on account for inventory purchased on November 1, 2010. Monte Cristo's fiscal year ends on December 31. Monte Cristo was unable to pay the amount owed by the January 31 due date because of financial difficulties.On February 1, 2011, Monte Cristo signed a
Yossarian Power Corporation provides electricity to a wide area of eastern Maine. During March 2009 it billed 3,000 of its residential customers located in the town of Maryville a total of $393,000 for electricity. In addition Yossarian Power is required to collect the following taxes:a. Meter
On November 20, 2011, Billy Pilgrim Technology agreed to manufacture and supply 800 centrifuges used by Cathcart Systems to produce chemicals. Cathcart deposited $100 per unit upon signing the three-year purchase agreement, which set the selling price of each centrifuge at $500. Billy Pilgrim will
Montague Auto Repair specializes in the repair of foreign car transmissions. To encourage business, Montague offers a six-month warranty on all repairs. The following data are available for 2009:Transmissions repaired, 2009 ........1,250Expected frequency of warranty claims .... 0.12 per
Consider the following information taken from Chicago Water Slide€™s (CWS€™s) financial statements:Also, Chicago Water Slide€™s Operating Cash Flows were $25,658 and $29,748 in 2008 and 2007, respectively.Required:1. Calculate CWS€™s current ratio for 2008
Many long-term loans have contractual restrictions designed to protect the lender from deterioration of the borrower's liquidity or solvency in the future. These restrictions (typically called loan covenants) often take the form of financial-statement ratio values. For example, a lending agreement
Rocky Mountain Products has a line-of-credit agreement with Norwest Bank that allows it to borrow up to $100,000 at any given time provided that Rocky Mountain's current assets always exceed its current liabilities by the principal amount of the outstanding loan. If this requirement is violated,
Obtain Whole Foods' 2007 annual report either through the ''Investor Relations'' portion of its website (do a web search for Whole Foods investor relations) or go to www.sec.gov and click ''Search for company filings'' under ''Filings & Forms (EDGAR).''Required:1. What are Whole Foods' total
Refer to the financial statements of Abercrombie & Fitch and Aeropostale that are supplied with this text.Required:1. Both Abercrombie & Fitch (Note 14) and Aeropostale (Note 14) have notes that discuss contingencies. What contingencies do they disclose? Do you think any of these
What is long-term debt?
What is the difference between a bond and a note? How do the accounting treatments differ?
What does the face (or par) value of a bond represent?
What is the stated or coupon rate of a bond?
How does a bond’s stated rate differ from its yield rate? Which one is used to calculate the interest payment?
How does a secured bond differ from an unsecured bond?
What does it mean if a bond is ‘‘callable’’?
What does it mean if a bond is ‘‘convertible’’?
What is a junk bond?
Describe the process that businesses follow to sell new issues of long-term debt.
Describe how the relationship between the stated rate and yield rate affect the price at which bonds are sold.
How are premiums and discounts presented on the balance sheet?
How do premiums and discounts on long-term debt securities affect interest expense?
What is the difference between the straight-line and effective interest rate methods of amortizing premiums and discounts?
How can there be interest expense each period for zero-coupon bonds if there are no interest payments?
Under the effective interest rate method, describe the difference in calculating the(1) Interest payment (2) Interest expense for the period.
How does a firm ‘‘leverage’’ its capital structure? When is leverage advantageous? When is it disadvantageous? Who receives the advantage or bears the disadvantage of leverage?
Name and describe two kinds of leases.
Which type of lease requires that a long-term debt and an asset be recorded at the inception of the lease?
Describe how the bond issue price is calculated.
Multiple-Choice Questions1. Which of the following statements regarding bonds payable is true?a. Generally, bonds are issued in denominations of $100.b. When an issuing company’s bonds are traded in the ‘‘secondary’’ market, the company will receive part of the proceeds when the bonds are
Multiple-Choice Questions1. When noninterest-bearing bonds are issued, the discount isa. Disregarded for financial reporting purposes.b. Expensed immediately.c. Amortized to interest expense each period.d. Credited to revenue.2. When interest-bearing bonds are issued at a discount, the interest
Multiple-Choice Questions1. Which of the following statements regarding leases is false?a. Lease agreements are a popular form of financing the purchase of assets because leases do not require a large initial outlay of cash.b. Accounting recognizes two types of leases-operating and capital
Dennis Corp. has the following bonds:a. $100,000 bond that has $2,000 of unamortized discount associated with it.b. $100,000 bond that has $3,000 of unamortized premium associated with it.Required:Provide the balance sheet presentation for these two bonds.
Anne Corp. issued $400,000, 6 percent bonds.Required:Provide the necessary journal entry to record the issuance of these bonds assuming:a. The bonds were issued at par.b. The bonds were issued at 104.c. The bonds were issued at 99.
EWO Enterprises issues $200,000 of bonds payable.Required:Provide the necessary journal entry to record the issuance of the bonds assuming:a. The bonds were issued at par.b. The bonds were issued at 102.c. The bonds were issued at 97.
M. Nickles Company issued $500,000 of bonds for $498,351. Interest is paid semiannually.Required:a. Provide the necessary journal entry to record the issuance of the bonds.b. Is the yield greater or less than the stated rate? How do you know?
On December 31, 2008, Brock & Co. issued $250,000 of bonds payable at par. The bonds have a 10 percent stated rate, pay interest on June 30 and December 31, and mature on December 31, 2011.Required:Provide the journal entries to record the interest payment on June 30, 2010.
Dean Plumbing issues $1,000,000 face value, noninterest-bearing bonds on December 31, 2009. The bonds are issued at 65 and mature on December 31, 2013.Required:Assuming the straight-line amortization method is followed provide the journal entry on December 31, 2012.
On December 31, 2007, Drew Company issued $170,000, five-year bonds for $155,000. The stated rate of interest was 6 percent and interest is paid annually on December 31.Required:Provide the necessary journal entry on December 31, 2009, assuming the straight-line method is followed.
Use the information from Cornerstone Exercise 9-32.Required:Prepare the amortization table for Drew Company's bonds.
On December 31, 2008, Ironman Steel issued $500,000, eight-year bonds for $508,000. The stated rate of interest was 9 percent and interest is paid annually on December 31.Required:Provide the necessary journal entry on December 31, 2012, assuming the straight-line method is followed.
Use the information from Cornerstone Exercise 9-34.Required:Prepare the amortization table for Ironman Steel's bonds.
Sicily Corporation issued $300,000 in 8 percent bonds (payable on December 31, 2018) on December 31, 2008, for $262,613. Interest is paid on June 30 and December 31. The market rate of interest is 10 percent.Required:Prepare the amortization table using the effective interest rate method.
Use the information from Cornerstone Exercise 9-36.Required:Record the journal entries for December 31, 2010 and 2011.
Crafty Corporation issued $650,000 of 10 percent, seven-year bonds on December 31, 2008, for $619,371. Interest is paid annually on December 31. The market rate of interest is 11 percent.Required:Prepare the amortization table using the effective interest rate method.
Use the information from Cornerstone Exercise 9-38.Required:Record the journal entry for December 31, 2009 and 2010.
Cookie Dough Corporation issued $500,000 in 6 percent, 10-year bonds (payable on December 31, 2018) on December 31, 2008, for $581,757. Interest is paid on June 30 and December 31. The market rate of interest is 4 percent.Required:Prepare the amortization table using the effective interest rate
Use the information from Cornerstone Exercise 9-40.Required:Record the journal entries for December 31, 2010 and 2011.
Charger Battery issued $100,000 of 11 percent, seven-year bonds on December 31, 2008, for $104,868. Interest is paid annually on December 31. The market rate of interest is 10 percent.Required:Prepare the amortization table using the effective interest rate method.
Use the information from Cornerstone Exercise 9-42.Required:Record the journal entries for December 31, 2010 and 2011.
Thornwood Lanes bought a service vehicle for $25,000 by issuing a 6 percent installment note on December 31, 2009. Thornwood will make 12 monthly payments of $2,151.66 at the end of each month.Required:Prepare the amortization table using the effective interest rate method.
Use the information from Cornerstone Exercise 9-44.Required:Record the journal entries for March 31, and April 30, 2010.
ABC bank loans $250,000 to Yossarian to purchase a new home. Yossarian will repay the note in equal monthly payments over a period of 30 years. The interest rate is 12 percent.Required:If the monthly payment is $2,571.53, how much of the first payment is interest expense and how much is principal
Barney Corporation's cost of debt financing is 8.5 percent. Its tax rate is 35 percent.Required:Calculate the after-tax interest rate to three decimal places.
Diamond Company's cost of debt financing is 9.5 percent. Its tax rate is 35 percent. Diamond has $2,000,000 of debt.Required:1. Calculate the after-tax cost amount of interest expense.2. How does the tax effect of interest expense affect financial leverage?
Southern Airlines has leased an aircraft from BAL Aircraft Company. The annual payments are $1,000,000, and the life of the lease is 18 years. It is estimated that the useful life of the aircraft is 20 years. The present value of the future lease payments is $8,755,630.Required:1. Would Southern
Watterson Corporation's balance sheet showed the following amounts: Current Liabilities, $70,000; Bonds Payable, $150,000; and Lease Obligations, $20,000. Total stockholders' equity was $90,000.Required:Calculate the debt-to-equity ratio.
Blue Corporation had $2,000,000 in total liabilities and $3,500,000 in total assets as of December 31, 2009.Required:Calculate Blue's debt to equity ratio.
Red Corporation had $2,000,000 in total liabilities and $3,500,000 in total assets as of December 31, 2009. Of Red's total liabilities, $350,000 is long-term.Required:Calculate Red's debt to assets ratio and its long-term debt to equity ratio.
On December 31, 2009, Garner Hot Rods issued $2,000,000 of 6 percent, 10-year bonds. Interest is payable semiannually on June 30 and December 31.Required:What is the issue price if the bonds are sold to yield 8 percent?
On December 31, 2009, Callahan Auto issued $1,500,000 of 8 percent, 10-year bonds.Interest is payable semiannually on June 30 and December 31.Required:What is the issue price if the bonds are sold to yield 6 percent (round to nearest dollar)?
Kartel Company is planning to issue 500 bonds, each having a face amount of $1,000.Required:1. Prepare the journal entry to record the sale of the bonds at par.2. Prepare the journal entry to record the sale of the bonds at a premium of $34,000.3. Prepare the journal entry to record the sale of the
Markway, Inc., is contemplating selling bonds. The issue is to be composed of 150 bonds, each with a face amount of $2,000.Required:1. Calculate how much Markway is able to borrow if each bond is sold at a premium of $20.2. Calculate how much Markway is able to borrow if each bond is sold at a
Kiwi Corporation issued at par $200,000, 8 percent bonds on December 31, 2008. Interest is paid annually on December 31. The principal and the final interest payment are due on December 31, 2010.Required:1. Prepare the entry to recognize the issuance of the bonds.2. Prepare the journal entry for
Kerwin Company borrowed $10,000 on a two-year, zero coupon note. The note was issued on December 31, 2008. The face amount of the note, $12,544, is to be paid at maturity on December 31, 2010.Required:1. Allocate the interest of $2,544 to the two one-year interest periods, using straight-line
Klamath Manufacturing sold 10-year bonds with a total face amount of $400,000 and a stated rate of 8.4 percent. The bonds sold for $424,000 on December 31, 2008, and pay interest semiannually on June 30 and December 31.Required:1. Prepare the entry to recognize the sale of the bonds.2. Determine
On December 31, 2009, Harrington Corporation sold $100,000 of 10-year, 9 percent bonds. The bonds sold for $96,000 and pay interest semiannually on June 30 and December 31.Required:1. Prepare the journal entry to record the sale of the bonds.2. Calculate the amount of the semiannual interest
On December 31, 2007, Philips Corporation issued bonds with a total face amount of $800,000 and a stated rate of 9 percent.Required:1. Calculate the interest expense for 2008 if the bonds were sold at par.2. Calculate the interest expense for 2008 if the bonds were sold at a premium and the
Cagney Company sold $200,000 of bonds on December 31, 2008. A portion of the amortization table appears below.Required:1. Determine the stated interest rate on these bonds.2. Calculate the interest expense and the discount amortization for the interest period ending June 30, 2010.3. Calculate the
For Dingle Corporation, the following amortization table was prepared when $400,000 of five-year, 7 percent bonds were sold on December 31, 2008, for $420,000.Required:1. Prepare the entry to recognize the issuance of the bonds on December 31, 2008.2. Prepare the entry to recognize the first
Panamint Candy Company prepared the following amortization table for $500,000 of five-year, 9.2 percent bonds issued and sold by Panamint on December 31, 2009, for $472,000:Required:1. Prepare the entry to recognize the sale of the bonds on December 31, 2009.2. Prepare the entry to recognize the
Sondrini Corporation sold $200,000 face value of bonds at 102 on December 31, 2008. These bonds have a 6 percent stated rate and mature in four years. Interest is payable on June 30 and December 31 of each year.Required:1. Prepare a bond amortization table assuming straight-line amortization.2.
Johnson Company sold for $90,000 a $102,400, two-year zero coupon bond on December 31, 2008. The bond matures on December 31, 2010.Required:1. Prepare the entry to record the issuance of the bond.2. Prepare the adjustment to recognize 2009 interest expense.3. Prepare the entry to recognize the 2010
Dodge City Products borrowed $100,000 cash by issuing a 36-month, $120,880 zero coupon note on December 31, 2009. The note matures on December 31, 2012.Required:1. Prepare the entry to recognize issuance of the note.2. Prepare the adjustments to recognize 2010 and 2011 interest.3. Prepare the entry
On January 1, 2009, Moody Company leased a warehouse for $20,000 per year. The first annual payment is due December 31, 2009. The present value of the lease payments, which is also the fair value of the warehouse, is $113,000.Required:1. Assume that the lease is an operating lease. Prepare the
Cardinal Company sold $200,000 of 10-year, 8 percent notes for $175,075. The notes were sold December 31, 2007 and pay interest semiannually on June 30 and December 31. The effective interest rate was 10 percent. Assume Cardinal uses the effective interest rate method.Required:1. Prepare the entry
On December 31, 2010, Hawthorne Corporation issued for $155,989, five-year bonds with a face amount of $150,000 and a stated (or coupon) rate of 9 percent. The bonds pay interest annually and have an effective interest rate of 8 percent. Assume Hawthorne uses the effective interest rate
Cagney Company sold $200,000 of bonds on June 30, 2010. A portion of the amortization table appears below.Required:1. Indicate the stated interest rate on these bonds.2. Calculate the effective annual interest rate on these bonds (rounded to the nearest 0.1 percent).3. Determine the interest
MacBride Enterprises sold $200,000 of bonds on December 31, 2011. A portion of the amortization table appears below.Required:1. Indicate the stated annual interest rate on these bonds.2. Calculate the effective annual interest rate on these bonds (rounded to the nearest 0.1 percent).3. Determine
Rising Stars Academy provided the following information on its 2009 Balance Sheet andStatement of Cash Flows:Required:1. Calculate the following ratios for both companies:a. Debt to equityb. Debt to total assetsc. Long-term debt to equityd. Times interest earned (accrual basis)e. Times interest
On December 31, 2008, University Theatres issued $500,000 face value of bonds. The stated rate is 6 percent, and interest is paid semiannually on June 30 and December 31.The bonds mature in 10 years.a. Assuming the market rate of interest is 4 percent calculate at what price the bonds are
Fridley Manufacturing’s accounting records reveal the following account balances after adjusting entries are made on December 31, 2012:Accounts payable ......................$ 62,500Bonds payable (9.4%, due in 2019) ............... 800,000Capital lease liability* ..................... 41,500Bonds
Perez Company borrowed $60,000 from the First National Bank on April 1, 2008, on a three-year, 8.7 percent note. Interest is paid annually on March 31.Required:1. Record the borrowing transaction in Perez’s journal.2. Prepare the adjustments made at December 31, 2008 and 2009.3. Prepare the
On December 31, 2012, Distel Company borrowed $25,900 by issuing three-year, 8.5 percent bonds with a face amount of $25,000. The bonds require annual interest payments (each equal to 8.5 percent of $25,000).Required:Prepare an amortization table using the following columnheadings:
On December 31, 2008, Sisek Company borrowed $800,000 with a 10-year, 9.75 percent note interest payable semiannually on June 30 and December 31. Cash in the amount of $792,800 was received when the note was issued.Required:1. Provide the necessary journal entry at December 31, 2008.2. Provide the
Edmonton-Alston Corporation issued five-year, 9.5 percent bonds with a total face value of $700,000 on December 31, 2011, for $726,000. The bonds pay interest on June 30 and December 31 of each year.Required:1. Prepare an amortization table.2. Prepare the entries to recognize the bond issue and
St. Cloud Manufacturing, Inc., issued five-year, 9.2 percent bonds with a total face value of $500,000 on December 31, 2008, for $484,000. The bonds pay interest on June 30 and December 31 of each year.Required:1. Prepare an amortization table.2. Prepare the entries to recognize the bond issuance
Girves Development Corporation has agreed to construct a plant in a new industrial park.To finance the construction, the county government issued $5,000,000 of 10-year, 4.75 percent revenue bonds for $5,125,000 on December 31, 2008. Girves will pay the interest and principal on the bonds. When the
On December 31, 2008, Felix Products borrowed $80,000 cash on a $105,800, 24 month zero coupon note. Felix uses the straight-line method of amortization.Required:1. Record the borrowing in Felix's journal.2. Prepare the adjusting entries for December 31, 2009.3. Prepare the entry to recognize the
On December 31, 2009, Georgetown Distributors borrowed $2,180,000 by issuing four-year, zero coupon bonds. The face value of the bonds is $3,000,000. Georgetown uses the straight-line method to amortize any premium or discount.Required:Prepare an amortization table for these bonds, using the
Trippler Company has decided to lease its new office building. The following information is available for the lease:Lease:Payments ............$100,000 per year*Length of lease .........15 yearsEconomic life of building .....16 yearsAppropriate interest rate ..... 8.4%Cost of building if purchased
Craig Corporation’s accounting records reveal the following account balances after adjusting entries are made on December 31, 2008:Accounts payable ....................... $ 73,000Bonds payable (9.4%, due in 2013) ................. 900,000Capital lease liability* ....................
Griddley Company borrowed $80,000 from the East Salvador Bank on February 1, 2008, on a three-year, 7.2 percent note. Interest is paid annually on January 31.Required:1. Record the borrowing transaction in Griddley's journal.2. Prepare the adjustments made at December 31, 2008 and 2009.3. Prepare
On December 31, 2008, The Rock Restaurant borrowed $36,000 by issuing three-year, 8.0 percent bonds with a face amount of $33,000. The bonds require annual interest payments (each equal to 8.0 percent of $33,000).Required:Prepare an amortization table using the following columnheadings:
On December 31, 2009, Benton Corporation borrowed $1,000,000 with a 10-year, 8.75 percent note interest payable semiannually on June 30 and December 31. Cash in the amount of $985,500 was received when the note was issued.Required:1. Provide the necessary journal entry at December 31, 2009.2.
Dalton Company issued five-year, 7.5 percent bonds with a total face value of $900,000 on December 31, 2008, for $950,000. The bonds pay interest on June 30 and December 31 of each year.Required:1. Prepare an amortization table.2. Prepare the entries to recognize the bond issue and the interest
Pennington Corporation issued five-year, 8.6 percent bonds with a total face value of $700,000 on December 31, 2009, for $680,000. The bonds pay interest on June 30 and December 31 of each year.Required:1. Prepare an amortization table.2. Prepare the entries to recognize the bond issuance and the
Dunn-Whitaker Construction has agreed to construct a plant in a new industrial park. To finance the construction, the county government issued $4,000,000 of 10-year, 5.25 percent revenue bonds for $4,100,000 on December 31, 2008. Dunn-Whitaker will pay the interest and principal on the bonds. When
On December 31, 2008, Sorenson Financing Corporation borrowed $90,000 cash on a $110,300, 24-month zero coupon note. Sorenson uses the straight-line method of amortization.Required:1. Record the borrowing in Sorenson's journal.2. Prepare the adjusting entries for December 31, 2009.3. Prepare the
Showing 26700 - 26800
of 107766
First
261
262
263
264
265
266
267
268
269
270
271
272
273
274
275
Last
Step by Step Answers
Get 50% OFF
Claim Now
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
