The debt is amortized by the periodic payment shown Compute (a) the number of payments required to amortizethe debt, (b) the outstanding principal at the time indicatedDebt PrincipalDebt PaymentPaymentIntervalConversionPeriodmonthlyOutstandingPrincipal After:6th paymentInterest Rate$16,000$1,4193 months6%(a) The number of payments required to amortize the debt isRound up to the nearest integer.)(b) The outstanding principal is S(Round the final answer to the nearest cent as needed Round all intermediate values to six decimal places asneeded).

According to the time value of money concept, an amount of money has two different purchasing power…

The debt is amortized by the periodic payment shown. Compute (a) the number of payments required to amortize the debt, (b) the outstanding principal at the time indicated. Debt PrincipalDebt Payment Payment Interval Outstanding Principal After: 6th payment Conversion Period Interest Rate $16,000 $1,419 3 months 6% monthly (a) The number of payments required to amortize the debt is (Round up to the nearest integer.) (b) The outstanding principal is S (Round the final answer to the nearest cent as needed Round all intermediate values to six decimal places as needed.)

The debt is amortized by the periodic payment shown. Compute (a) the number of payments required to amortize the debt, (b) the outstanding principal at the time indicated. Debt PrincipalDebt Payment Payment Interval Outstanding Principal After: 6th payment Conversion Period Interest Rate $16,000 $1,419 3 months 6% monthly (a) The number of payments required to amortize the debt is (Round up to the nearest integer.) (b) The outstanding principal is S (Round the final answer to the nearest cent as needed Round all intermediate values to six decimal places as needed.)

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 14MC: Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the...

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Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued October 1, 2019, are due September 30, 2020, and pay interest semiannually on March 31 and September 30. Assume an effective yield rate of 14%. Required: 1. Prepare a bond interest expense and discount amortization schedule using the straight-line method. 2. Prepare a bond interest expense and discount amortization schedule using the effective interest method. 3. Prepare adjusting entries for the end of the fiscal year December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. If income before interest and income taxes of 30% in 2020 is 500,000, compute net income under each alternative. 5. Assume the company retired the bonds on June 30, 2020, at 98 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight line method of amortization b. effective interest method of amortization 6. Compute the companys times interest earned (pretax operating income divided by interest expense) for 2020 under each alternative.
Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the market of interest was 9%. The company uses the effective-interest method of amortization. At the end of the year, the company will record ________. A. a credit to cash for $28,733 B. a debit to interest expense for $31,267 C. a debit to Discount on Bonds Payable for $1,267 D. a debit to Premium on Bonds Payable for $1.267
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