ACCT 200 Study Guide - Final Guide: Treasury Stock, Accounts Payable, Accrual

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pucemouse259

14 Dec 2019

School

University of Arizona

Department

Accounting

Course

ACCT 200

Professor

Rob Stussie

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Document Summary

Accounting 200 - exam 3 (final) study guide ally. Calculate the present value of a bond with semiannual interest payments. Calculation of monthly interest expense for a loan with either monthly or annual payments. Journal entry for monthly or annual payment of interest and principal. Ending note (mortgage) payable balance after payment of interest and principal. Sales tax, unearned revenue and current portion of long-term. Calculation of interest for full or partial year. Accrued interest expense journal entry at year end. Issuance of bonds at face value, premium and discounts, journal entries, & impact on borrowing costs. Journal entry to record accrued annual interest expense for premium & discount bonds (app 10b) Journal entry to record the payment of annual interest for all bond issuances. Stock issue considerations (par vs. no par value & journal entry to issue stock) Treasury stock definition, journal entry, reasons to issue. Dividends (cash & stock) and their effects on financial statements.

Related Questions

Define current liabilities. List the current liabilitieswe cover in this chapter.

What are payroll deductions? Provide someexamples.

How is net pay calculated?

Employer payroll taxes include FICA Tax andFederal & State Unemployment Tax. Which expense account isdebited for employer payroll taxes? Provide an example journalentry.

Employee payroll taxes include FICA Tax &Income Tax. Which expense account is debited for employee payrolltaxes? Provide an example journal entry.

What is the formula to calculate interest on a notepayable?

Provide the following journal entries:

Establish note payable

Accrue interest incurred but not paid

Record interest paid

Record principal paid

Explain the current portion of long termdebt.

What are contingent liabilities?

What is the debt-to-assets ratio and what does it tellyou?

What is the times interest earned ratio and what does ittell you?

What are the three key elements of a bond?

What types of bonds are available?

Explain the difference between face value and issueprice.

Explain when each occurs, how interest is recorded, andprovide the journal entry for:

Bonds issued at face value

Bonds issued at a premium

Bonds issued at a discount

Bond Amortization using the Effective InterestMethod:

Bond Retirement:

Time Value of Money:

PAYROLL ENTRIES

J&W Buffet Co. employees earned $350,000 in the week endedDecember 17, 2010. Of this, $26,775 was deducted from employeesâpay for FICA and $62,000 was deducted for income taxes.

Prepare the journal entry to record the employeesâ portion ofpayroll for December 17, 2010.

Prepare the journal entry to record the employerâs share of FICApayroll taxes for December 17, 2010.

HW 9 â 2

NOTES PAYABLE

Mumford Co. borrowed a $100,000 note payable on June 1, 2010,with 6% interest. The note is due on May 31, 2011.

Prepare the journal entry to record the issuance of the note andreceipt of cash on June 1, 2010.

Prepare the adjusting journal entry to record the interest owedat the end of the accounting period on December 31, 2010.

Prepare the journal entries to record the interest and principalpayments to the lender on May 31, 2011.

HW 9 â 3

UNEARNED REVENUE

On January 1, 2009, Charlie Rangel paid $2,000 for a twoâyearmembership to the Beam Gym.

Prepare the journal entry to record the receipt of cash onJanuary 1, 2009.

By December 31, 2009, one half of Rangelâs membership expired.Prepare the required adjusting journal entry on that date.

By December 31, 2010, the remainder of Rangelâs membershipexpired. Prepare the required adjusting journal entry on thatdate.

Post the entries above to the Unearned Revenue account:

Unearned Revenue

HW 9 â 4

ISSUING BONDS

Issuance of $800,000, 5-year, 8% payable annually (market rate12%) for cash of $684,627 on 1/1/07

Were these bonds issued at a discount or at a premium? Why?

Prepare the journal entry to record the issuance (sale) of thebonds:

Complete the following interest schedule (assuming straight-lineamortization):

Date	Cash Payment of Interest	Interest Expense	Amortization of Discount	Carrying Value (Net Liability)
1/1/2007	None	None	None
12/31/2007
12/31/2008
12/31/2009
12/31/2010
12/31/2011

Prepare the journal entry to record the first payment ofinterest on 12/31/2007:

HW 9 â 5

ISSUING BONDS

Issuance of $1,200,000, 5-year, 10% payable annually (marketrate 8%) for cash of $1,295,844 on 1/1/07

Were these bonds issued at a discount or at a premium? Why?

Prepare the journal entry to record the issuance (sale) of thebonds:

Complete the following interest schedule (assuming straight-lineamortization):

Date	Cash Payment of Interest	Interest Expense	Amortization of Premium	Carrying Value (Net Liability)
1/1/2007	None	None	None
12/31/2007
12/31/2008
12/31/2009
12/31/2010
12/31/2011

Prepare the journal entry to record the first payment ofinterest on 12/31/2007:

whitewhale375

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.

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ACCT 200 Study Guide - Final Guide: Treasury Stock, Accounts Payable, Accrual

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