ACC 110 Lecture Notes - Union Dues, Contingent Liability, Capital Structure

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viridianzebra871

6 Oct 2012

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To record the bank loan: dr. building (a+) To record the mortgage payment: dr. cash (a+) To record repayment and interest for the short-term loan. The amount of the unused gift cards would be a current liability of ,000 (,000 - ,000) because the outstanding gifts cards can be redeemed at any time. d. The transaction increases current assets and current liabilities by an equal amount. The effect on the current ratio would depend on the current ratio before. 1, the transaction would increase the ratio, and if the current ratio was above 1, it would decrease it. When the gift certificates are redeemed the current ratio would increase because the amount of unearned revenue and inventory would decrease, but inventory would decrease less than the unearned revenue. The ,000 due in october would be a current liability because it"s due within the coming year. The remainder of the balance due in 2016 (,000) would be a non-current liability.

Related Questions

Garcia Company issues 10%, 15-year bonds with a par value of$170,000 and semiannual interest payments. On the issue date, theannual market rate for these bonds is 8%, which implies a sellingprice of 117 1?4. The effective interest method is used to allocateinterest expense.

1. Using the implied selling price of 117 1?4,what are the issuer's cash proceeds from issuance of thesebonds.

Cashproceeds

2. What total amount of bond interest expensewill be recognized over the life of these bonds?

TotalBond Interest Expense Over Life of Bonds:
Amountrepaid:
	paymentsof
Par valueat maturity
Totalrepayments
Lessamount borrowed (from part 1)
Total bond interest expense

3. What amount of bond interest expense isrecorded on the first interest payment date?
Bond interest expense: ????

Bringham Company issues bonds with a par value of $800,000 on their stated issue date. The bonds mature in 10 years and pay 6% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 8%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)

What is the amount of each semiannual interest payment for these bonds?
How many semiannual interest payments will be made on these bonds over their life?
Use the interest rates given to select whether the bonds are issued at par, at a discount, or at a premium.

Par (maturity) value	Semiannual Rate		Semiannual cash interest payment
		=

Number of payments

Whether the bonds are issued at par, at a discount, or at a premium?

Compute the price of the bonds as of their issue date.

Table Values are Based on:
n =
i =
Cash Flow	Table Value	Amount	Present Value
Par (maturity) value
Interest (annuity)
Price of bonds

Prepare the journal entry to record the bondsâ issuance.

1- Record the issue of bonds with a par value of $800,000 for cash.

jadecrab927

Citywide Company issues bonds with a par value of $150,000 ontheir stated issue date. The bonds mature in five years and pay 10%annual interest in semiannual payments. On the issue date, theannual market rate for the bonds is 8%. What is the amount of eachsemiannual interest payment for these bonds?

indigosheep536

ACC 110 Lecture Notes - Union Dues, Contingent Liability, Capital Structure

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