On January 1, 2024, Baddour, Incorporated, Issued 10%, 12-year bonds with a face amount of $177...

 

 

 

 

 

 

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On January 1, 2024, Baddour, Incorporated, Issued 10%, 12-year bonds with a face amount of $177 million. The bonds were priced at $155 million to yield 12%. Interest is paid semiannually on June 30 and December 31. Baddour's fiscal year ends September 30. Required: 1. What amount(s) related to the bonds would Baddour report in its balance sheet at September 30, 2024? 2. What amount(s) related to the bonds would Baddour report in its income statement for the year ended September 30, 2024? 3. What amount(s) related to the bonds would Baddour report in its statement of cash flows for the year ended September 30, 2024? In which section(s) should the amount(s) appear? Note: For all requirements, enter your answers in whole dollars. 1. Net bonds payable. 1. Interest payable 2. Interest expense for fiscal 2024 3. Sale of bonds 3. Cash interest paid On February 1, 2024, Sanyal Motor Products issued 8% bonds, dated February 1, with a face amount of $90 million. The bonds mature on January 31, 2028 (four years). The market yield for bonds of similar risk and maturity was 10%. Interest is paid semiannually on July 31 and January 31. Barnwell Industries acquired $90,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31. Required: 1. Determine the price of the bonds issued on February 1, 2024. 2-a. Prepare amortization schedules that Indicate Sanyal's effective Interest expense for each Interest period during the term to maturity. 2-b. Prepare amortization schedules that indicate Barnwell's effective interest revenue for each interest period during the term to maturity. 3. Prepare the journal entries to record the issuance of the bonds by Sanyal and Barnwell's investment on February 1, 2024. 4. Prepare the journal entries by both firms to record all events related to the bonds through January 31, 2026. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Sanyal Req 4 Barnwell Determine the price of the bonds issued on February 1, 2024. Note: Do not round intermediate calculations. Enter your answer in whole dollars. On January 1, 2024, Rodriguez Window and Pane issued $19.7 million of 10-year, zero-coupon bonds for $6,938,034. Required: 2. Determine the effective rate of interest. 1. & 3. to 5. Prepare the necessary journal entries. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Interest rate General Journal Determine the effective rate of interest. Interest rate % At the beginning of 2024, VHF Industries acquired a machine with a fair value of $4,803,660 by issuing a three-year, noninterest- bearing note in the face amount of $6 million. The note is payable in three annual installments of $2 million at the end of each year. Required: 1.What is the effective rate of interest implicit in the agreement? 2. to 4. Prepare the necessary journal entries. 5. Suppose the market value of the machine was unknown at the time of purchase, but the market rate of interest for notes of similar risk was 11%. Prepare the journal entry to record the purchase of the machine. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 4 Req 5 What is the effective rate of interest implicit in the agreement? Interest rate % Determine the price of a $1.6 million bond issue under each of the following independent assumptions: 1. Maturity 10 years, interest paid annually, stated rate 8%, effective (market) rate 10%. 2. Maturity 10 years, interest paid semiannually, stated rate 8%, effective (market) rate 10%. 3. Maturity 10 years, Interest paid semiannually, stated rate 10%, effective (market) rate 8%. 4. Maturity 20 years, interest paid semiannually, stated rate 10%, effective (market) rate 8%. 5. Maturity 20 years, interest paid semiannually, stated rate 10%, effective (market) rate 10%. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1, FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Maturity 10 years, interest paid annually, stated rate 8%, effective (market) rate 10%. Note: Round your answer to the nearest whole dollar. Price of bonds The Bradford Company issued 10% bonds, dated January 1, with a face amount of $70 million on January 1, 2024 to Saxton-Bose Corporation. The bonds mature on December 31, 2033 (10 years). For bonds of similar risk and maturity, the market yield is 12% Interest is paid semiannually on June 30 and December 31. Required: 1. to 3. Prepare the journal entries to record the purchase of the bonds by Saxton-Bose on January 1, 2024, interest revenue on June 30, 2024 and interest revenue on December 31, 2024 (at the effective rate). Note: Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) View transaction list Journal entry worksheet < 1 2 3 Record the purchase of the bonds by Saxton-Bose. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit > EJ Help Save & Exit Submit https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/questio... M Question 8 - CH 14 Problems On January 1, 2024, Baddour, In + CH 14 Problems i Saved 8 0.71 points Universal Foods issued 12% bonds, dated January 1, with a face amount of $155 million on January 1, 2021 to Wang Communications. The bonds mature on December 31, 2038 (15 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. eBook Hint Required: 1. to 3. Prepare the journal entries to record the purchase of the bonds by Wang Communications on January 1, 2024, interest revenue on June 30, 2024 and interest revenue on December 31, 2031. Note: Round your final answers to the nearest whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) View transaction list References Mc Graw Hill USD/JPY +1.33% Journal entry worksheet 1 2 3 Record the investment in bonds on January 1, 2024. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit Search -- < Prev 8 of 14 Next PRE %. T NEW D. Check my work ENG 0 A 1:25 PM 2/4/2024 > EJ Help Save & Exit Submit M Question 9 - CH 14 Problems On January 1, 2024, Baddour, In + https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/questio... CH 14 Problems i 9 Discount on bonds payable Cash Required: 2,160 89,040 Saved 0.71 points Prepare any journal entry necessary to correct the errors as of February 2, 2024, when the errors were discovered. Also, prepare any adjusting entry at December 31, 2024, related to the situation described. (Ignore income taxes.) Note: Do not round your intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list eBook Hint References Mc Graw Hill USD/JPY +1.33% Journal entry worksheet 1 2 Record the error correction as of February 2, 2024. Note: Enter debits before credits. Date February 02, 2024 General Journal Debit Credit > Record entry Clear entry View general journal Search < Prev 9 of 14 Next > PRE 9. T NEW D. Check my work 0 A ENG 1:25 PM 2/4/2024 > M Question 10 - CH 14 Problems On January 1, 2024, Baddour, In + EJ Save & Exit Submit https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/questio... CH 14 Problems i Saved 10 0.71 points Nakano Food Products, Incorporated, acquired a packaging machine from Lawrence Specialists Corporation. Lawrence completed construction of the machine on January 1, 2022. In payment for the machine Nakano issued a three-year installment note to be paid in three equal payments at the end of each year. The payments include interest at the rate of 8%. Lawrence made a conceptual error in preparing the amortization schedule, which Nakano failed to discover until 2024. The error had caused Nakano to understate interest expense by $52,000 in 2022 and $47,000 in 2023. eBook Required: 101 Hint References Mc Graw Hill USD/JPY +1.33% 1. Determine which accounts are incorrect as a result of these errors at January 1, 2024, before any adjustments. (Ignore income taxes.) 2. Prepare a journal entry to correct the error. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine which accounts are incorrect as a result of these errors at January 1, 2024, before any adjustments. (Ignore income taxes.) Note: Select all that apply. Note payable understated. Retained earnings understated. 2022 Interest expense overstated. 2022 Interest expense understated. Retained earnings overstated. Note payable overstated. 2023 Interest expense overstated. 2023 Interest expense understated. < Required 1 Search Required 2 > < Prev 10 of 14 Next > PRE 9. T NEW Help Check my work 0 A ENG 1:25 PM 2/4/2024 > M Question 11 - CH 14 Problems On January 1, 2024, Baddour, In + EJ Save & Exit Submit https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/questio... CH 14 Problems i 11 Saved 0.71 points eBook Hint Amber Mining and Milling, Incorporated, contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2024. Amber paid for the lathe by issuing a $500,000, three-year note that specified 6% interest, payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions that 10% was a reasonable rate of interest. Required: 1-a. Complete the table below to determine the price of the equipment. 1-b. Prepare the journal entry on January 1, 2024, for Amber Mining and Milling's purchase of the lathe. 2. Prepare an amortization schedule for the three-year term of the note. 3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) References Mc Graw Hill USD/JPY +1.33% Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3 Complete the table below to determine the price of the equipment. Note: Round final answers to the nearest whole dollar. Round your percentage answer in one decimal place. Table values are based on: n = j = % Cash Flow Amount Present Value Interest Principal Price of equipment < Req 1A Req 1B > Search < Prev 11 of 14 Next > PRE 9. T NEW Help Check my work 0 A ENG 1:25 PM 2/4/2024 > EJ Help Save & Exit Submit https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/questio... M Question 12 - CH 14 Problems On January 1, 2024, Baddour, In + CH 14 Problems i 12 0.71 points eBook Hint Saved The balance sheet of River Electronics Corporation as of December 31, 2023, included 13.00% bonds having a face amount of $92.0 million. The bonds had been issued in 2016 and had a remaining discount of $5.0 million at December 31, 2023. On January 1, 2024, River Electronics called the bonds before their scheduled maturity at the call price of 103. Required: Prepare the journal entry by River Electronics to record the redemption of the bonds at January 1, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars. View transaction list References Journal entry worksheet 1 Mc Graw Hill USD/JPY +1.33% Record the redemption of the bonds. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit Record entry Clear entry Search View general journal < Prev 12 of 14 Next > PRE 9. T NEW D. Check my work ENG 0 A 1:25 PM 2/4/2024 > On January 1, 2024, Baddour, In + https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/q... Q M Question 13 - CH 14 Problems CH 14 Problems i 13 Saved 0.71 points eBook Hint On August 1, 2024, Perez Communications issued $30 million of 11% nonconvertible bonds at 103. The bonds are due on July 31, 2044. Each $1,000 bond was issued with 20 detachable stock warrants, each of which entitled the bondholder to purchase, for $50, one share of Perez Communications' no par common stock. Interstate Containers purchased 20% of the bond issue. On August 1, 2024, the market value of the common stock was $47 per share and the market value of each warrant was $9. In February 2035, when Perez common stock had a market price of $61 per share and the unamortized discount balance was $2 million, Interstate Containers exercised the warrants it held. Required: 1. Prepare the journal entries on August 1, 2024, to record (a) the issuance of the bonds by Perez and (b) the investment by Interstate. 2. Prepare the journal entries for both Perez and Interstate in February 2035, to record the exercise of the warrants. References Mc Graw Hill USD/JPY +1.33% Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entries on August 1, 2024, to record (a) the issuance of the bonds by Perez and (b) the investment by Interstate. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions and round to 2 decimal places (i.e., 5,500,000 should be entered as 5.50). View transaction list Journal entry worksheet A B Record the issuance of the bonds by Perez. Note: Enter debits before credits. Event 1 General Journal Debit Credit Search > < Prev PRE 13 of 14 Next > %. T NEW D' EJ Help Save & Exit Submit Check my work 0 A ENG 1:25 PM 2/4/2024 > M Question 14 - CH 14 Problems On January 1, 2024, Baddour, In + https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/q... Q CH 14 Problems i Saved 14 0.77 points eBook References On January 1, 2024, Rapid Airlines issued $300 million of its 8% bonds for $276 million. The bonds were priced to yield 10%. Interest is payable semiannually on June 30 and December 31. Rapid Airlines records interest at the effective rate and elected the option to report these bonds at their fair value. On December 31, 2024, the fair value of the bonds was $290 million as determined by their market value in the over-the-counter market. Rapid determined that $1,000,000 of the increase in fair value was due to a decline in general interest rates. Required: 1. to 3. Prepare the journal entries to record interest on June 30, 2024 (the first interest payment), on December 31, 2024 (the second interest payment) and to adjust the bonds to their fair value for presentation in the December 31, 2024, balance sheet. Note: Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Mc Graw Hill USD/JPY +1.33% View transaction list Journal entry worksheet 1 2 3 Record interest on June 30, 2024 (the first interest payment). Note: Enter debits before credits. Date June 30, 2024 General Journal Debit Credit > Record entry Clear entry View general journal Search < Prev 14 of 14 Next > PRE 9%. D' T NEW EJ Help Save & Exit Submit Check my work 0 A ENG 1:25 PM 2/4/2024 On January 1, 2024, Baddour, Incorporated, Issued 10%, 12-year bonds with a face amount of $177 million. The bonds were priced at $155 million to yield 12%. Interest is paid semiannually on June 30 and December 31. Baddour's fiscal year ends September 30. Required: 1. What amount(s) related to the bonds would Baddour report in its balance sheet at September 30, 2024? 2. What amount(s) related to the bonds would Baddour report in its income statement for the year ended September 30, 2024? 3. What amount(s) related to the bonds would Baddour report in its statement of cash flows for the year ended September 30, 2024? In which section(s) should the amount(s) appear? Note: For all requirements, enter your answers in whole dollars. 1. Net bonds payable. 1. Interest payable 2. Interest expense for fiscal 2024 3. Sale of bonds 3. Cash interest paid On February 1, 2024, Sanyal Motor Products issued 8% bonds, dated February 1, with a face amount of $90 million. The bonds mature on January 31, 2028 (four years). The market yield for bonds of similar risk and maturity was 10%. Interest is paid semiannually on July 31 and January 31. Barnwell Industries acquired $90,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31. Required: 1. Determine the price of the bonds issued on February 1, 2024. 2-a. Prepare amortization schedules that Indicate Sanyal's effective Interest expense for each Interest period during the term to maturity. 2-b. Prepare amortization schedules that indicate Barnwell's effective interest revenue for each interest period during the term to maturity. 3. Prepare the journal entries to record the issuance of the bonds by Sanyal and Barnwell's investment on February 1, 2024. 4. Prepare the journal entries by both firms to record all events related to the bonds through January 31, 2026. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 3 Req 4 Sanyal Req 4 Barnwell Determine the price of the bonds issued on February 1, 2024. Note: Do not round intermediate calculations. Enter your answer in whole dollars. On January 1, 2024, Rodriguez Window and Pane issued $19.7 million of 10-year, zero-coupon bonds for $6,938,034. Required: 2. Determine the effective rate of interest. 1. & 3. to 5. Prepare the necessary journal entries. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Interest rate General Journal Determine the effective rate of interest. Interest rate % At the beginning of 2024, VHF Industries acquired a machine with a fair value of $4,803,660 by issuing a three-year, noninterest- bearing note in the face amount of $6 million. The note is payable in three annual installments of $2 million at the end of each year. Required: 1.What is the effective rate of interest implicit in the agreement? 2. to 4. Prepare the necessary journal entries. 5. Suppose the market value of the machine was unknown at the time of purchase, but the market rate of interest for notes of similar risk was 11%. Prepare the journal entry to record the purchase of the machine. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 4 Req 5 What is the effective rate of interest implicit in the agreement? Interest rate % Determine the price of a $1.6 million bond issue under each of the following independent assumptions: 1. Maturity 10 years, interest paid annually, stated rate 8%, effective (market) rate 10%. 2. Maturity 10 years, interest paid semiannually, stated rate 8%, effective (market) rate 10%. 3. Maturity 10 years, Interest paid semiannually, stated rate 10%, effective (market) rate 8%. 4. Maturity 20 years, interest paid semiannually, stated rate 10%, effective (market) rate 8%. 5. Maturity 20 years, interest paid semiannually, stated rate 10%, effective (market) rate 10%. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1, FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Maturity 10 years, interest paid annually, stated rate 8%, effective (market) rate 10%. Note: Round your answer to the nearest whole dollar. Price of bonds The Bradford Company issued 10% bonds, dated January 1, with a face amount of $70 million on January 1, 2024 to Saxton-Bose Corporation. The bonds mature on December 31, 2033 (10 years). For bonds of similar risk and maturity, the market yield is 12% Interest is paid semiannually on June 30 and December 31. Required: 1. to 3. Prepare the journal entries to record the purchase of the bonds by Saxton-Bose on January 1, 2024, interest revenue on June 30, 2024 and interest revenue on December 31, 2024 (at the effective rate). Note: Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) View transaction list Journal entry worksheet < 1 2 3 Record the purchase of the bonds by Saxton-Bose. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit > EJ Help Save & Exit Submit https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/questio... M Question 8 - CH 14 Problems On January 1, 2024, Baddour, In + CH 14 Problems i Saved 8 0.71 points Universal Foods issued 12% bonds, dated January 1, with a face amount of $155 million on January 1, 2021 to Wang Communications. The bonds mature on December 31, 2038 (15 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. eBook Hint Required: 1. to 3. Prepare the journal entries to record the purchase of the bonds by Wang Communications on January 1, 2024, interest revenue on June 30, 2024 and interest revenue on December 31, 2031. Note: Round your final answers to the nearest whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) View transaction list References Mc Graw Hill USD/JPY +1.33% Journal entry worksheet 1 2 3 Record the investment in bonds on January 1, 2024. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit Search -- < Prev 8 of 14 Next PRE %. T NEW D. Check my work ENG 0 A 1:25 PM 2/4/2024 > EJ Help Save & Exit Submit M Question 9 - CH 14 Problems On January 1, 2024, Baddour, In + https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/questio... CH 14 Problems i 9 Discount on bonds payable Cash Required: 2,160 89,040 Saved 0.71 points Prepare any journal entry necessary to correct the errors as of February 2, 2024, when the errors were discovered. Also, prepare any adjusting entry at December 31, 2024, related to the situation described. (Ignore income taxes.) Note: Do not round your intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list eBook Hint References Mc Graw Hill USD/JPY +1.33% Journal entry worksheet 1 2 Record the error correction as of February 2, 2024. Note: Enter debits before credits. Date February 02, 2024 General Journal Debit Credit > Record entry Clear entry View general journal Search < Prev 9 of 14 Next > PRE 9. T NEW D. Check my work 0 A ENG 1:25 PM 2/4/2024 > M Question 10 - CH 14 Problems On January 1, 2024, Baddour, In + EJ Save & Exit Submit https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/questio... CH 14 Problems i Saved 10 0.71 points Nakano Food Products, Incorporated, acquired a packaging machine from Lawrence Specialists Corporation. Lawrence completed construction of the machine on January 1, 2022. In payment for the machine Nakano issued a three-year installment note to be paid in three equal payments at the end of each year. The payments include interest at the rate of 8%. Lawrence made a conceptual error in preparing the amortization schedule, which Nakano failed to discover until 2024. The error had caused Nakano to understate interest expense by $52,000 in 2022 and $47,000 in 2023. eBook Required: 101 Hint References Mc Graw Hill USD/JPY +1.33% 1. Determine which accounts are incorrect as a result of these errors at January 1, 2024, before any adjustments. (Ignore income taxes.) 2. Prepare a journal entry to correct the error. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine which accounts are incorrect as a result of these errors at January 1, 2024, before any adjustments. (Ignore income taxes.) Note: Select all that apply. Note payable understated. Retained earnings understated. 2022 Interest expense overstated. 2022 Interest expense understated. Retained earnings overstated. Note payable overstated. 2023 Interest expense overstated. 2023 Interest expense understated. < Required 1 Search Required 2 > < Prev 10 of 14 Next > PRE 9. T NEW Help Check my work 0 A ENG 1:25 PM 2/4/2024 > M Question 11 - CH 14 Problems On January 1, 2024, Baddour, In + EJ Save & Exit Submit https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/questio... CH 14 Problems i 11 Saved 0.71 points eBook Hint Amber Mining and Milling, Incorporated, contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2024. Amber paid for the lathe by issuing a $500,000, three-year note that specified 6% interest, payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions that 10% was a reasonable rate of interest. Required: 1-a. Complete the table below to determine the price of the equipment. 1-b. Prepare the journal entry on January 1, 2024, for Amber Mining and Milling's purchase of the lathe. 2. Prepare an amortization schedule for the three-year term of the note. 3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) References Mc Graw Hill USD/JPY +1.33% Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3 Complete the table below to determine the price of the equipment. Note: Round final answers to the nearest whole dollar. Round your percentage answer in one decimal place. Table values are based on: n = j = % Cash Flow Amount Present Value Interest Principal Price of equipment < Req 1A Req 1B > Search < Prev 11 of 14 Next > PRE 9. T NEW Help Check my work 0 A ENG 1:25 PM 2/4/2024 > EJ Help Save & Exit Submit https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/questio... M Question 12 - CH 14 Problems On January 1, 2024, Baddour, In + CH 14 Problems i 12 0.71 points eBook Hint Saved The balance sheet of River Electronics Corporation as of December 31, 2023, included 13.00% bonds having a face amount of $92.0 million. The bonds had been issued in 2016 and had a remaining discount of $5.0 million at December 31, 2023. On January 1, 2024, River Electronics called the bonds before their scheduled maturity at the call price of 103. Required: Prepare the journal entry by River Electronics to record the redemption of the bonds at January 1, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars. View transaction list References Journal entry worksheet 1 Mc Graw Hill USD/JPY +1.33% Record the redemption of the bonds. Note: Enter debits before credits. Date January 01, 2024 General Journal Debit Credit Record entry Clear entry Search View general journal < Prev 12 of 14 Next > PRE 9. T NEW D. Check my work ENG 0 A 1:25 PM 2/4/2024 > On January 1, 2024, Baddour, In + https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/q... Q M Question 13 - CH 14 Problems CH 14 Problems i 13 Saved 0.71 points eBook Hint On August 1, 2024, Perez Communications issued $30 million of 11% nonconvertible bonds at 103. The bonds are due on July 31, 2044. Each $1,000 bond was issued with 20 detachable stock warrants, each of which entitled the bondholder to purchase, for $50, one share of Perez Communications' no par common stock. Interstate Containers purchased 20% of the bond issue. On August 1, 2024, the market value of the common stock was $47 per share and the market value of each warrant was $9. In February 2035, when Perez common stock had a market price of $61 per share and the unamortized discount balance was $2 million, Interstate Containers exercised the warrants it held. Required: 1. Prepare the journal entries on August 1, 2024, to record (a) the issuance of the bonds by Perez and (b) the investment by Interstate. 2. Prepare the journal entries for both Perez and Interstate in February 2035, to record the exercise of the warrants. References Mc Graw Hill USD/JPY +1.33% Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entries on August 1, 2024, to record (a) the issuance of the bonds by Perez and (b) the investment by Interstate. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions and round to 2 decimal places (i.e., 5,500,000 should be entered as 5.50). View transaction list Journal entry worksheet A B Record the issuance of the bonds by Perez. Note: Enter debits before credits. Event 1 General Journal Debit Credit Search > < Prev PRE 13 of 14 Next > %. T NEW D' EJ Help Save & Exit Submit Check my work 0 A ENG 1:25 PM 2/4/2024 > M Question 14 - CH 14 Problems On January 1, 2024, Baddour, In + https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/q... Q CH 14 Problems i Saved 14 0.77 points eBook References On January 1, 2024, Rapid Airlines issued $300 million of its 8% bonds for $276 million. The bonds were priced to yield 10%. Interest is payable semiannually on June 30 and December 31. Rapid Airlines records interest at the effective rate and elected the option to report these bonds at their fair value. On December 31, 2024, the fair value of the bonds was $290 million as determined by their market value in the over-the-counter market. Rapid determined that $1,000,000 of the increase in fair value was due to a decline in general interest rates. Required: 1. to 3. Prepare the journal entries to record interest on June 30, 2024 (the first interest payment), on December 31, 2024 (the second interest payment) and to adjust the bonds to their fair value for presentation in the December 31, 2024, balance sheet. Note: Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Mc Graw Hill USD/JPY +1.33% View transaction list Journal entry worksheet 1 2 3 Record interest on June 30, 2024 (the first interest payment). Note: Enter debits before credits. Date June 30, 2024 General Journal Debit Credit > Record entry Clear entry View general journal Search < Prev 14 of 14 Next > PRE 9%. D' T NEW EJ Help Save & Exit Submit Check my work 0 A ENG 1:25 PM 2/4/2024