P13.14 (LO 1, 3, 4) Groupwork (Comprehensive Problem: Issuance, Classification, Reporting)

Presented below are three independent situations.

Instructions

a. On January 1, 2025, Langley Co. issued 9% bonds with a face value of $700,000 for $656,992 to yield 10%. The bonds are dated January 1, 2025, and pay interest annually. What amount is reported for interest expense in 2025 related to these bonds?

b. Tweedie Building Co. has a number of long-term bonds outstanding at December 31, 2025.

These long-term bonds have the following sinking fund requirements and maturities for the next 6 years.

Sinking Fund Maturities 2026 $300,000 $100,000 2027 100,000 250,000 2028 100,000 100,000 2029 200,000 —

2030 200,000 150,000 2031 200,000 100,000 Indicate how this information should be reported in the financial statements at December 31, 2025.

c. In the long-term debt structure of Beckford Inc., the following three bonds were reported: mortgage bonds payable $10,000,000; collateral trust bonds $5,000,000; bonds maturing in installments, secured by plant equipment $4,000,000. Determine the total amount, if any, of debenture bonds outstanding.