Exam (elaborations)

ACC 211 CHAPTER 10-12 QUESTIONS WITH 100% CORRECT ANSWERS { GRADED A+}

2 views 0 purchase

Course
ACC 211

Institution
ACC 211

[Show more]

Preview 4 out of 39 pages

View example

Uploaded on August 22, 2024
Number of pages 39
Written in 2024/2025
Type Exam (elaborations)
Contains Questions & answers

acc 211 chapter 10 12

$11.49

Added

Add to cart

Add to wishlist

100% satisfaction guarantee
Immediately available after payment
Both online and in PDF
No strings attached

ACC 211 CHAPTER 10-12 QUESTIONS

WITH 100% CORRECT ANSWERS {

GRADED A+}

Charger Company's most recent balance sheet reports total assets of $31,347,000,

total liabilities of $18,447,000 and total equity of $12,900,000. The debt to equity

ratio for the period is (rounded to two decimals) - ✔✔1.43 (debt to equity ratio =

total liabilities/total equity)

Morgan Company issues 10%, 20-year bonds with a par value of $690,000 that pay

interest semiannually. The amount paid to the bondholders for each semiannual

interest payment is. - ✔✔$34,500 (= 690,000*.1*.5; .5 is the part of a year)

A company issued 8%, 15-year bonds with a par value of $450,000 that pay

interest semiannually. The market rate on the date of issuance was 8%. The journal

entry to record each semiannual interest payment is - ✔✔debit Bond Interest

Expense $18,000; credit Cash $18,000 (=450,000*.08*.5)

,On January 1, Parson Freight Company issues 8.5%, 10-year bonds with a par

value of $3,300,000. The bonds pay interest semiannually. The market rate of

interest is 9.5% and the bond selling price was $3,075,762. The bond issuance

should be recorded as - ✔✔debit Cash $3,075,762; debit Discount on Bonds

Payable $224,238; credit Bonds Payable $3,300,000

On January 1 of Year 1, Congo Express Airways issued $3,250,000 of 5% bonds

that pay interest semiannually on January 1 and July 1. The bond issue price is

$2,930,000 and the market rate of interest for similar bonds is 6%. The bond

premium or discount is being amortized at a rate of $10,667 every six months.

After accruing interest at year end, the company's December 31, Year 1 balance

sheet should reflect total liabilities associated with the bond issue in the amount of

- ✔✔$3,032,584. (discount on bonds payable = par value - issue value; year one

amortization = amortization rate*2; unamortized discount = discount on bonds

payable - year one amortization; carrying value of bonds = par value - unamortized

discount; interest accrual = par value* rate*.5; total liabilities = carrying value of

bonds + interest accrual)

On January 1 of Year 1, Congo Express Airways issued $2,500,000 of 5% bonds

that pay interest semiannually on January 1 and July 1. The bond issue price is

$2,260,000 and the market rate of interest for similar bonds is 6%. The bond

,premium or discount is being amortized at a rate of $8,000 every six months. The

amount of interest expense recognized by Congo Express Airways on the bond

issue in Year 1 would be: - ✔✔$141,000 (annual interest expense = 2*[(par

value*rate*6/12) + amortization rate per six months])

On January 1 of Year 1, Congo Express Airways issued $4,800,000 of 7%, bonds

that pay interest semiannually on January 1 and July 1. The bond issue price is

$4,404,000 and the market rate of interest for similar bonds is 8%. The bond

premium or discount is being amortized using the straight-line method at a rate of

$11,000 every 6 months. The life of these bonds is: - ✔✔18 years (annual

discount amortization = $22,000 ($11,000 × 2); bond discount = $4,800,000 −

$4,404,000 = $396,000; discount/amortization = life of bonds ($396,000/$22,000 =

18 years))

On January 1, a company issued and sold a $395,000, 8%, 10-year bond payable,

and received proceeds of $390,000. Interest is payable each June 30 and December

31. The company uses the straight-line method to amortize the discount. The

journal entry to record the first interest payment is - ✔✔debit Bond Interest

Expense $16,050; credit Cash $15,800; credit Discount on Bonds Payable $250

(cash = $395,000 × .08 × 1/2 = $15,800; discount amortized = ($395,000 −

$390,000)/20 = $250; interest expense = $15,800 + $250 = $16,050))

, On January 1, a company issued and sold a $480,000, 5%, 10-year bond payable,

and received proceeds of $473,000. Interest is payable each June 30 and December

31. The company uses the straight-line method to amortize the discount. The

carrying value of the bonds immediately after the first interest payment is -

✔✔$473,350 (discount amortized = ($480,000 - $473,000)/(2*10) = $350;

carrying value = $480,000 bond payable less $6,650 unamortized discount ($7,000

− $350))

On January 1, a company issued and sold a $420,000, 3%, 10-year bond payable,

and received proceeds of $415,000. Interest is payable each June 30 and December

31. The company uses the straight-line method to amortize the discount. The

carrying value of the bonds immediately after the second interest payment is -

✔✔$415,500 (discount amortized = ($420,000 − $415,000)/20 = $250; carrying

value = $420,000 bond payable less $4,500 unamortized discount ($5,000 − (2 ×

$250)))

A company issued 5-year, 5% bonds with a par value of $91,000. The company

received $88,947 for the bonds. Using the straight-line method, the amount of

interest expense for the first semiannual interest period is - ✔✔$2,480.30 (cash

interest paid = 91,000*.05*.5; discount amortization = (91,000-88947)/(5*2);

semiannual interest expense = cash interest paid + discount amortization)

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller morren. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $11.49. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

75632 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling

Popular Universities in the United States

Popular books

Find notes and summaries for these qualifications

Exam (elaborations)

ACC 211 CHAPTER 10-12 QUESTIONS WITH 100% CORRECT ANSWERS { GRADED A+}

Document information

Subjects

Written for

Seller

Content preview