Accounting > QUESTIONS & ANSWERS > ACCT551 Week 3 HOMEWORK 2021 (All)
E14-9 (LO1) GROUPWORK (Entries and Questions for Bond Transactions) On June 30, 2017, Mischa Auer Company issued $4,000,000 face value of 13%, 20-year bonds at $4,300,920, a yield of 12%. Auer uses ... the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. Instructions (Round answers to the nearest cent.) (a)Prepare the journal entries to record the following transactions. (1) The issuance of the bonds on June 30, 2017. (2) The payment of interest and the amortization of the premium on December 31, 2017. (3) The payment of interest and the amortization of the premium on June 30, 2018. (4) The payment of interest and the amortization of the premium on December 31, 2018. (b)Show the proper balance sheet presentation for the liability for bonds payable on the December 31, 2018, balance sheet. (c)Provide the answers to the following questions. (1) What amount of interest expense is reported for 2018? (2) Will the bond interest expense reported in 2018 be the same as, greater than, or less than the amount that would be reported if the straight-line method of amortization were used? (3) Determine the total cost of borrowing over the life of the bond. (4) Will the total bond interest expense for the life of the bond be greater than, the same as, or less than the total interest expense if the straight-line method of amortization were used? [Show More]
Last updated: 2 years ago
Preview 1 out of 4 pages
Buy this document to get the full access instantly
Instant Download Access after purchase
Buy NowInstant download
We Accept:
Can't find what you want? Try our AI powered Search
Connected school, study & course
About the document
Uploaded On
Sep 13, 2021
Number of pages
4
Written in
This document has been written for:
Uploaded
Sep 13, 2021
Downloads
0
Views
123
In Scholarfriends, a student can earn by offering help to other student. Students can help other students with materials by upploading their notes and earn money.
We're available through e-mail, Twitter, Facebook, and live chat.
FAQ
Questions? Leave a message!
Copyright © Scholarfriends · High quality services·