Acc Module Exam 14

Module Exam II: Chapter 14

1. On October 1 of the current year a corporation sold, at par plus accrued interest, $1,000,000 of its 12% bonds,

which were dated July 1 of this year. What amount of bond interest expense should the company report on its current year income statement?

2. A company issued 9%, 10years bonds with a par value of $1,000,000 on September 1, Year 1 when the market rate was 9%. The bonds were dated June 30, Year 1.

The bond issue price included accrued interest. Interest is paid semiannually on December 31 and June 30.

(a) Prepare the issuer’s journal entry to record the issuance of the bonds on September 1.

(b) Prepare the issuer’s journal entry to record the semiannual interest payment on December 31, Year 1.

 

3. A company issued 9.2%, 10-year bonds with a par value of $100,000.  Interest is paid semiannually.

The market interest rate of the issue date was 10%, and the issuer received $95,016 for the bonds.

On the first semiannual interest date, what amount of cash should be paid to the holds of these bonds for interest?

 

4. On January 1, a company issued 10-year, 10% bonds payable with a par value of $500,000, and received $442,647 in cash proceeds.

The market rate of interest at the date of issuance was 12%. The bonds pay interest semiannually on July 1 and January 1.

The issuer uses the straight-line method for amortization. Prepare the issuer’s journal entry to record the first semiannual interest payment on July 1.

5. Wiffery company had the following trading securities in its porfolio of December 31. The fair value adjustment-Trading account

had a balance of zero prior to year end adjustment. Prepare the appropriate adjusting journal entry.

6. Kramer Corporation had the following long investment transactions.

Jan 2;purchased 5,000 shares of Optic, Inc for $42 per share plus $7,000 in fess and comminssion.

These shares represent 35% of ownership of Optic.

Oct 15:Received Optic, Inc. cash dividend of $2 per share.

Dec 31:Optic reported a net loss of $66,000 for the year.

Prepare the journal entries for Karmer Corporation should record for these transactions and events.

 

You can place an order similar to this with us. You are assured of an authentic custom paper delivered within the given deadline besides our 24/7 customer support all through.

 

[order_calculator]