Assume instead that the bonds are issued at a premium

Assignment Help Accounting Basics
Reference no: EM13921495

The three typical accounting events associated with borrowing money through a bond issue are:

1. Exchanging the bonds for cash on the day of issue. 
2. Making cash payments for interest expense and recording amortization when applicable. 
3. Repaying the principal at maturity. 

Required:

a. Assuming the bonds are issued at face value, show the effect of each of the three events on the financial statements, using a horizontal statements model like the following one. Use + for increase, - for decrease, and NA for not affected.

1254_264-B-A-L (2942).png

b. Repeat the requirements in Requirement a, but assume instead that the bonds are issued at a discount. 
c. Repeat the requirements in Requirement a, but assume instead that the bonds are issued at a premium. 

Reference no: EM13921495

Questions Cloud

What is the amount of the firms net fixed assets : Ratios and Fixed Assets - The Le Bleu Company has a ratio of long-term “debt ratio” .35 and a current ratio of 1.25. Current liabilities are $950, sales are $5,780, profit margin is 9.4 percent, and ROE is 18.2 percent. What is the amount of the firm..
About the what is the modified duration : What is the Macaulay duration of a 5.6 percent coupon bond with ten years to maturity and a current price of $1,057.70? What is the modified duration? (Do not round intermediate calculations. Round your answers to 3 decimal places.)
Means of chester has an asset turnover of 1.63 : Chester has an asset turnover of 1.63 (Asset Turnover = Sales/Assets). What means it?
Compare the percentage gains and losses : Stock in Cheezy-Poofs Manufactory is currently priced at $50 per share. A call option with a $50 strike and 90 days of maturity is quoted at $1.95. Compare the percentage gains and losses from a $97,500 investment in the stock versus the option in 90..
Assume instead that the bonds are issued at a premium : Repeat the requirements in Requirement a, but assume instead that the bonds are issued at a premium.
Potential gains from trade in insurance to healthy people : Potential gains from trade in selling insurance to healthy people are lost unless the company can devise a way to address the adverse selection problem.
What is its economic value added : Waterway Brothers has the following data for the year ending 12/31/07: Net income = $600; Net operating profit after taxes (NOPAT) = $700; Total assets = $2,500; Short-term investments = $200; Stockholders' equity = $1,800; Total debt = $700; and Tot..
Write a report about ahima website : Write a 2 page report about AHIMA Website, Explore the AHIMA website at http://www.ahima.org. Write a 2 page report about what you learned from this website. Be sure to share the following information in your writing: AHIMA's mission statement
Find the duration to estimate the new price of the bond : Consider a 5.4 percent coupon bond with nine years to maturity and a current price of $1,055.40. Suppose the yield on the bond suddenly increases by 2 percent. Find the duration to estimate the new price of the bond. And calculate the new bond price.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Are there restrictions or limitations in place by the sec

are there restrictions or limitations in place by the sec or sox that would exclude companies based on size and if so

  Operation of an effective corporate whistleblower hotline

Use the Internet to conduct research related to whistleblower processes. Discuss the key characteristics for the operation of an effective corporate whistleblower hotline. Be sure to highlight potential pitfalls that should be avoided.

  Company recorded its ending inventory

At the end of Year 1, Manny Company recorded its ending inventory at $350,000 based on a physical count.

  Assume that you are an accountant at xyz company xyz

assume that you are an accountant at xyz company. xyz management has asked you to assist them with an issue. xyz is

  Jackson corporations bonds have 19 years remaining to

jackson corporations bonds have 19 years remaining to maturity. interest is paid annually the bonds have a 1000 par

  How much equity does have in the house

Homer Simpson bought a house for $70,000 some years ago. Heput 20% down and financed the rest with a 25 year mortgage of 8.5%interest. How much equity does Homer have in the house?

  A piece of equipment has a cost of 20000 the equipment will

a piece of equipment has a cost of 20000. the equipment will provide cost savings of 3500 each year for ten years after

  List all the entries made by spectacor in the final year

List all the entries made by Spectacor in the final year of the lease.

  What is the net income for the period

What is the net income for the period and what is the net income for the period

  Where should amc report any gain or loss on this transaction

Prepare the journal entries to record the issuance of the 4 percent bonds and the early retirement of the 6 percent bonds. Assume both sets of bonds were issued at face value. Where should AMC report any gain or loss on this transaction? What dollar ..

  Shipping inventory to customers

Dobbs Wholesale Antiques makes all sales under terms of FOB shipping point. The company usually receives orders for sales approximately one week before shipping inventory to customers.

  The sunflower inc makes and sells tasty hamburgers for 8

the sunflower inc makes and sells tasty hamburgers for 8 per unit with a unit variable cost of 6. all sales are for

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