ACC 102 Lecture 5: ACC 102 Quiz Study Gides

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coppertoad742

28 Jan 2019

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Determine the future value of an amount with compounding. Determine the present value of an amount, or series of amounts. Be able to calculate and record interest payments. Know what causes a bond to be issued at a discount or premium. How to record a bond issued at either a premium or a discount. How to calculate the carrying value of a bond. How to calculate and record bond interest expense under the straight-line method and the effective interest method. Define operating, investing, and financing activities in a statement of cash flows. Oct 1, chapters 12 -13 what types of transactions appear in each. Know how to record a stock issuance. How to record sale of treasury stock for more than its purchase price. Know the characteristics of a stock split.

Related Questions

On January 1, Altman Company issued bonds that had a par valueof $53,500 with a stated interest rate of 4% and a 5 year maturitydate. The bonds pay interest semiannually on June 30 and December31.

The bonds are issued at 100 3/4.

a) Prepare the journal entries Altman Company mustrecord in its books at bond issuance and the first interest paymentdate. Altman Company uses the straight line method to amortize anydiscount or premium.

Date	Description	Debit	Credit
01/01


	to record the sale of bonds at a premium (100 3/4 of parvalue)

06/30


	to record the semi-annual interest payment &amortization of discount or premium on bonds

periwinklehare573

Hillside issues $1,800,000 of 7%, 15-year bonds dated January 1,2015, that pay interest semiannually on June 30 and December 31.The bonds are issued at a price of $1,555,401.

Required:
1.	Prepare the January 1, 2015, journal entry to record the bondsâissuance.

2(a) For each semiannual period, complete thetable below to calculate the cash payment.

Par (maturity) value		Annual Rate		Year		Semiannual cash interestpayment
					=

2(b) For each semiannual period, complete thetable below to calculate the straight-line discountamortization.

Par (maturity) value		Bonds price		Discount on Bonds Payable		Semiannual periods		Straight-line discountamortization
			=				=

2(c) For each semiannual period, complete thetable below to calculate the bond interest expense

Semiannual cash payment		Discount amortization		Bond interest expense
			=

3. Complete the below table to calculate the total bond interestexpense to be recognized over the bonds' life.

Total bond interest expenseover life of bonds:
Amount repaid:
	payments of
Par value at maturity
Total repaid
Less amount borrowed
Total bond interestexpense

4 Prepare the first two years of anamortization table using the straight-line method.

Semiannual Period-End	Unamortized Discount	Carrying Value
01/01/2013
06/30/2013
12/31/2013
06/30/2014
12/31/2014

5 Prepare the journal entries to record thefirst two interest payments.

silverhyena646

On January 1, Year 1, Acorn Financial Corp. issued 850convertible bonds. Each $1,000 face value bond is convertible into5 shares of common stock. The bonds have a 10 year term to maturityand pay interest semiannually. Acorn's common stock has a par valueof $20.00 per share. The bonds have a stated interest rate of 4%and pay interest semiannually. The convertible bonds were sold for$875,500. Bond issue costs of $50,000 will be subtracted from thebond sale proceeds to be received by Acorn. The bonds were sold toyield a market interest rate of 3%. Acorn will use the effectiveinterest method to amortize the bond discount and/or premium. Roundall amounts to the nearest dollar.
1.Record the journal entry for the issuance of the convertiblebonds on January 1, Year 1.

2.Record the journal entries on June 30, Year 1 to recognizeinterest expense and the amortization of the bond issue cost forthe first six months of Year

viridianpug363

ACC 102 Lecture 5: ACC 102 Quiz Study Gides

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