Solution-Assume the market rate on january

Assume the market rate on january

Assignment Help Accounting Basics

Reference no: EM13901034

Legacy issues $ 325,000 of 5%, four year bonds dated January 1, 2013, that pay interest semiannually on June 30 and December 31. They are issued at $ 292,181 and their market rate is 8% at the issue date.

Required:

1. Prepare the January 1, 2013, journal entry to record the bonds issuance.
2. Determine the total bond interest expense to be recognized over the bonds life.
3. Prepare a straight line amortization table like the one in Exhibit 14.7 for the bonds first two years.
4. Prepare the journal entries to record the first two interest payments.
Analysis Component:
5. Assume the market rate on January 1, 2013, is 4% instead of 8%. Without providing numbers, describe how this change affects the amounts reported on Legacy s financial statements.

Reference no: EM13901034

Questions Cloud

Use the information below to prepare a balance sheet : Use the information below to prepare a balance sheet and a cash flow statement forMr. King. Calculate his net worth and cash surplus or deficit. (All expenses are on monthly basis).

Discuss the long-term effects : 1. Problem identification (Global Warming): Clearly indicate the issue you will discuss and the influence this problem has on land, air, water resources, plant life, animal life, and human societies. Discuss the long-term effects this problem will..

How the ruling in the case impacts the lives of americans : The Supreme Court is made up of nine justices who are responsible for deciding whether or not laws are in line with the U.S. Constitution

What is the total charge on the disc : The electron density on the surface of a circular disc of radius 20 m is given as ne = 300ρ cos2 φ electrons/meter2. Determine the number of electrons residing on the surface of the disc. What is the total charge on the disc?

Assume the market rate on january : Legacy issues $ 325,000 of 5%, four year bonds dated January 1, 2013, that pay interest semiannually on June 30 and December 31. They are issued at $ 292,181 and their market rate is 8% at the issue date.

Calculate pcd return on sales and roi for 2014 : PCD managers are evaluated and rewarded on the basis of ROI defined as operating income divided by total assets. Barkley Industries expects its divisions to increase ROI each year.

What amount of safety stock is appropriate : The demand of the winter jacket varies over the week (7 days). The average demand per week is 50 items. Given that the retailer’s order lead time is two days, the average lead time demand is 16 items and the standard deviation during lead time is 3 i..

What descriptive words would best portray the tone : What descriptive words would best portray the tone

Kilogram of fossil carbon burned : The concentrations increased exponentially until the energy crisis in the mid-1970's rose at a rate of 1.5 ppm/year for several decades, and in the 2000s began rising at a rate of 2.0 ppm/year and higher. Every kilogram of fossil carbon burned pro..

User Account

All Pages

Assume the market rate on january

Reference no: EM13901034

Reference no: EM13901034

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT