Chapter 7 Accounting for Liabilities

Financial Accounting

General Accounting

4. MC.11.162 A company issued $1,000,000 of 30-year, 8% callable bonds on April 1, with interest payable on April 1 and October 1. The fiscal year of the company is the calendar year. What is the journal entry needed when the bonds are issued at face value? O a. debit Cash and Discount on Bonds Payable, credit Bonds Payable O b. debit Cash, credit Bonds Payable O c. debit Bonds Payable, credit Cash O d. debit Cash, credit Premium on Bonds Payable and Bonds Payable 5. MC.11.163 A company issued $1,000,000 of 30-year, 8% callable bonds on April 1, with interest payable on April 1 and October 1. The fiscal year of the company is the calendar year. The bonds are called at the end of year 3 for 104. What is the entry to record the redemption? (Assume the interest payment has been recorded separately.) O a. Bonds Payable 1,000,000 Gain on Redemption of Bonds 40,000 Cash 1,040,000 O b. Bonds Payable 1,000,000 Loss on Redemption of Bonds 40,000 Cash 1,040,000 O c. Bonds Payable 1,040,000 Cash…

Question 1 Analyzing and Computing Accrued Interest on Notes Compute any interest accrued for each of the following notes payable owed by Penman, Inc., as of December 31 of the current year (assume a 365-day year). Round your answers to two decimal places. Coupon Lender Issuance Date Principal Rate (%) Term Accrued Interest Nissim 11/21 $18,000 10% 120 days $ Klein 12/13 14,000 90 days $ Bildersee 12/19 16,000 12 60 days $

Question 6: A 21-month $6,779.99 promissory note bearing interest of 7.5% compounded monthly was sold on its date of issue to a finance company at a discount rate of 9.9% compounded monthly. Determine the proceeds of the sale.

Assuming a 360-day year, the interest charged by the bank, at the rate of 6%, on a 90-day, discounted note payable of $106,407 is

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Accrued Interest PayableCompute the interest accrued on each of the following notes payable owed by Northland, Inc., on December 31:Use 360 days for calculations and round to the nearest dollar.   Lender Date of Note Principal Interest Rate (%) Term Maple 11/21 $18,000 11   120 days Wyman 12/13 14,000 8   90 days Nahn 12/10 16,000 12   60 days   Lender Accrued Interest Maple Answer Wyman Answer Nahn Answer

Given the following information from an amortization table for December 31, prepare the journal entry to record the payment of interest. 6% Cash Interest $42,000 4% Effective Interest Premium Amortization $35,953 $6,047 Carrying Value $507,567 OA. Account December 31 Interest Expense Discount on Bonds Payable Cash Debit Credit 35,953 6,047 42.000 O B. Account Debit Credit December 31 Interest Expense 35,953 Premium on Bonds Payable 6,047 Cash 42,000 Account December 31 Interest Expense Discount on Bonds Payable Bonds Payable O D. Account December 31 Interest Payable Premium on Bonds Payable Interest Expense Debit Credit 35,953 6,047 42,000 Debit Credit 42,000 6,047 35,953

41 On October 1 of the current year, an entity received a one-year note receivable bearing interest at the market rate. The face amount of the note receivable and the entire amount of the interest are due on September 30 of next year. The interest receivable on December 31 of the current year would consist of an amount representing   Group of answer choices Three months of accrued interest income The excess on October 1 of the present value of the note receivable over its fact amount Nine months of accrued interest income Twelve months of accrued interest income

7

Answer it

mam.7

How do I solve this?

j. Interest was accrued on the note receivable received on October 17 ($100,000, 90-day, 9% note). Assume 360 days per year. Date Description Debit Credit Dec. 31 Interest Receivable v 1,850 X Interest Revenue v 2,250 X

Assuming a 360-day year, the interest charged by the bank, at the rate of 8%, on a 90-day, discounted note payable of $105,987 is a.$4,240 b.$8,479 c.$2,120 d.$105,987

Question 24. Torpedo plc took out a bank loan on 1 April 20X0 for $10,000. It is due to be paid back in equ monthly instalments of $250, starting on 1 May 20X0. How should Torpedo include the loan in its statement of financial position at 30 June 20X0? A non-current liability of $9,500 A current liability of $3,000 and a non-current liability of $7,000 A non-current liability of $10,000 A current liability of $3,000 and a non-current liability of $6,500

USE THE FOLLOWING INFORMATION FOR THIS QUESTION: Installment note payable borrowed from the bank Present value interest factor from table Signed for Annual interest rate Payments are made 195,060 $7,802 $99,442 The outstanding loan balance at the end of year 3 equals what amount? $103,420 zero $287,000 unable to determine 2.77509 3 years 4% Annually

A B E 2 Determine the maturity date and compute interest for each note. 3 Days to be used per year 360 days 4 Note Contract Date Principal Interest Rate Period of Note (Term) 6. 1 1-Mar $10,000 6% 60 days 7 2 15-May 15,000 8% 90 days 8 3 20-Oct 8,000 4% 45 days 9. 10 Required: 11 12 (Use cells A5 to F8 from the given information to complete this question.) 13 14 Note Contract Date Maturity Date Interest Expense 15 16 17 3 18

True or false?

Subject: accounting

Given the annual interest rate and a line of an amortization schedule for that loan, complete the next line of the schedule. Assume that payments are made monthly. Annual Interest Paid on Interest Rate Payment Paid Principal Balance 11.6% $425.57 $64.23 $361.34 $6,280.78 Fill out the amortization schedule below. Annual Interest Paid on Payment Balance Interest Rate Paid Principal 11.6% $425.57 $64.23 $361.34 $6,280.78 (Round to the nearest cent as needed.)

ezto.mi Calculate the monthly payment by table lookup and formula. (Answers will not be exact due to rounding of percents in table lookup.). (Use 13% for table lookup.). (Use the loan amortization table) (Round your answers to the nearest cent.) Number of Total of monthly payments $5,849.76 Total finance monthly payments Amount Purchase price of a used car $5,793 Down charge $1,339.76 financed APR payment $1, 283 48 $4,510 13% Monthly Payment es By table By formula

The interest due at maturity on a $489.52, 8% note, dated May 28 and due August 2 is a.$6.30. b.$7.18. c.$4.37. d.$6.04.