ABC Corp issued a bond for $87,000 at par. The bond will mature in 10 years when the principal will be paid, additionally every six months coupon interest will be paid. The issue date was planned for July 1st when the market interest rate was at 6%. However the bonds are actually sold on September 1st when the market interest rate was 5%. ABC Corp. prepares its annual financial statements on October 31st. Required 1: What is the amount of cash received by ABC Corp. on September 1st? $ Required 2: What is the amount of interest payable recognized in the books as of October 31st of year 1? $ Required 3: What is the amount of loan payable cancelled in year 10? $ Instructions: Use 2 decimal places and only type the number without signs except for negative numbers that are preceded by a minus sign "-". If the right answer is 1070.39 you type "1070.39", it will not be read as correct if you type "1,070.39", "$1070.39" or any other combination. If the right answer is negative 1070.39 you type "-1070.39"
ABC Corp issued a bond for $87,000 at par. The bond will mature in 10 years when the principal will be paid, additionally every six months coupon interest will be paid. The issue date was planned for July 1st when the market interest rate was at 6%. However the bonds are actually sold on September 1st when the market interest rate was 5%. ABC Corp. prepares its annual financial statements on October 31st. Required 1: What is the amount of cash received by ABC Corp. on September 1st? $ Required 2: What is the amount of interest payable recognized in the books as of October 31st of year 1? $ Required 3: What is the amount of loan payable cancelled in year 10? $ Instructions: Use 2 decimal places and only type the number without signs except for negative numbers that are preceded by a minus sign "-". If the right answer is 1070.39 you type "1070.39", it will not be read as correct if you type "1,070.39", "$1070.39" or any other combination. If the right answer is negative 1070.39 you type "-1070.39"
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 15MCQ
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