Bond issue and first semiannual interest payment

Assignment Help Cost Accounting
Reference no: EM13343185

On the first day of its fiscal year, Ramsey Company issued $35,000,000 of 10-year, 9% bonds to finance its operations. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 11%, resulting in Ramsey Company receiving cash of $30, 817,399. The company uses the interest method.

a. Journalize the entries to record the following:

1. Sale of the bonds.

2. Prepare an amortization table through December 31, 2014(4 interest periods for this bond issue

3. First semiannual interest payment, including amortization of discount. Round to the nearest dollar.

4. Second semiannual interest payment, including amortization of discount. Round to the nearest dollar.

5. compute the amount of the bond interest expense for the first year.

(B) Yates Corporation has the following stockholders' equity accounts on Jan 1, 2012:

Common Stock, $10 par value: $1,500,000

Paid-in Capital in Excess of Par: 200,000

Retained Earnings: 500,000

Total Stockholders' Equity: $2,200,000

The company uses the cost method to account for treasury stock transactions. During 2012, the following treasury stock transactions occurred:

April 1 Purchased 10,000 shares at $18 per share.

August 1 Sold 4,000 shares at $22 per share.

October 1 Sold 4,000 shares at $15 per share

Instructions:

(A) Journalize the treasury stock transactions for 2012.

(B) Prepare the Stockholders' Equity section of the balance sheet for Yates Corporation at December 31, 2012. Assume net income was $110,000 for 2012.

C. KT Corporation wholesales auto parts to auto manufacturers. On march 1, 2012, Kt corporation issued $17,500,000 of five year, 12% bonds at market (effective) interest rate of 10%, receiving cash of $18,851,252. interest is payable semiannually. KT corporation's fiscal years begins on March 1. The company uses the interest method.

a.Journalize the entries to record the following:

1. sale of the bonds.

2.prepare an amortization table through 3 interest periods for this bond issue.

3. First semiannual interest payment, including amortization of discount. Round to nearest dollar.

4.Second semiannual interest payment, including amortization of discount. Round to nearest dollar.

5.Compute the amount of the bond interest expense for the first year.

Reference no: EM13343185

Questions Cloud

How much thermal energy is created : A 900N crate slides 12m down a ramp that makes an angle of 40 ? with the horizontal. how much thermal energy is created
What is the electrons potential energy : In a semiclassical model of the hydrogen atom, the electron orbits the proton at a distance of 0.053 nm. What is the electron's potential energy
Explain change in volume or amount of gas : Using the same sample of gas (P 1= 795 torr , T 1 = 37 C ), we wish to change the pressure to 7950 torr with no accompanying change in volume or amount of gas. What temperature T 1, in Celsius, is needed to reach this pressure
Problem on packer manufacturing company : Production and cost data for the month of February for Process A of the Packer manufacturing Company follow.
Bond issue and first semiannual interest payment : Prepare an amortization table through 3 interest periods for this bond issue and first semiannual interest payment, including amortization of discount. Round to nearest dollar.
Calculate the average exhaust speed of the engine : A model rocket engine has an average thrust of 5.26 N. It has an initial mass of 24.9 g, which includes fuel mass of 12.2 g. What is the average exhaust speed of the engine
Explain what will happen to the volume of the gas : Consider a gas in a container with an initial pressure, temperature, and volume. What will happen to the volume of the gas if the number of moles are increased 6 times (6x), the pressure is quadrupled and the temperature is tripled
Problem on journal entries larney corporation : Raw materials that cost $68,200 are withdrawn from the storeroom for use in the Mixing Department. Direct materials amounted to 75%, with the balance classified as indirect materials.
Determine the average power of the engine : A 1300kg sports car accelerates from 0m/s to 26m/s in 13s. What is the average power of the engine?

Reviews

Write a Review

 

Cost Accounting Questions & Answers

  Evaluate the slope and the cost

Evaluate the slope then explain what it means in terms of the rate of change of the dependent variable per unit change in the independent variable.

  Evaluate the price of the bonds at january

Determine the journal entry to record their issuance by The Bradford Company on January 1, 2013.

  Which one of the following reflects the controllable margin

Which one of the following reflects the controllable margin for the year - Safety Seats Co. recorded operating data for its shoe division for the year.

  What were the actual costs in april

Using this information, prepare a budget for May stating the total amount for the May budget. Assume the budget will increase to 23,000 jars of sauce reflecting anticipated sales increase related to a new marketing campaign.

  Find what will percentage change in operating cash flow

Evaluate that the degree of operating leverage is 2.90. The output rises to 78,000 units - Find what will the percentage change in operating cash flow ?

  Compute arrows direct material variances

Compute Arrows direct material variances, compute Arrow's direct labor variances and compute Arrow's variances for factory overhead.

  What restriction on federal employees are contained

What restriction on federal employees are contained in the the Antideficiency Act and the Government Performance Results Act addresses performance plans and reports

  Difficulties associated with allocating overhead costs

Discuss the difficulties associated with allocating overhead costs in the contemporary manufacturing environment and identify strategies that firms can adopt to help make their overhead allocations more accurate and reliable.

  What is the amount of expense harris must recognize

Harris Company borrowed $800,000 from Liber Bank on January 1, 2013 in order to expand its mining capabilities. The five-year note required annual payments of $208,349 and carried an annual interest rate of 8.5%. What is the amount of expense Harr..

  How are these standards regulated

Evaluate and summarize the differences between International Financial Reporting Standards (IFRS) and U.S. Generally Accepted Accounting Principles (GAAP). Why is this important? How will it be implemented? How are these standards regulated? Who r..

  In a cost-volume-profit graph

In a cost-volume-profit graph

  Compute the predetermined overhead rate

Comparative balance sheet of Anders Company, illustrate horizontal and vertical analysis - financial statements and additional information, compute the following ratios for Coulter Company for 2009. Show all computations.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd