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    Assignment Chapter 14

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    Nicolas Ernesto
    The document discusses current and non-current liabilities related to serial bonds payable. It provides details on the face value, interest rate, and maturity date of the bonds. It also includes journal entries recording the issuance of the bonds for cash, semi-annual interest payments, and amortization of the bond premium over time.

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    Assignment Chapter 14

    Uploaded by

    Nicolas Ernesto
    25 views8 pages
    The document discusses current and non-current liabilities related to serial bonds payable. It provides details on the face value, interest rate, and maturity date of the bonds. It also includes journal entries recording the issuance of the bonds for cash, semi-annual interest payments, and amortization of the bond premium over time.

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    Assignment chapter 14

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    The document discusses current and non-current liabilities related to serial bonds payable. It provides details on the face value, interest rate, and maturity date of the bonds. It also includes journal entries recording the issuance of the bonds for cash, semi-annual interest payments, and amortization of the bond premium over time.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    25 views8 pages

    Assignment Chapter 14

    Uploaded by

    Nicolas Ernesto
    The document discusses current and non-current liabilities related to serial bonds payable. It provides details on the face value, interest rate, and maturity date of the bonds. It also includes journal entries recording the issuance of the bonds for cash, semi-annual interest payments, and amortization of the bond premium over time.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 8

    a.

    Current Liability

    b. Serial Bonds Payable 1,000,000 which 250,000 are due each july 31
    Current Liabilities 250000

    Non Current Liabliites 750000

    c. Current Liabilities

    d. Non Current Liabilities

    e. Current Liabilities

    f. Current Liabilities

    g. Current Liabilities

    h. Current Liabilities
    Bonds Payable 5000000 Date
    Face Value 13% 30-Jun
    Market Value 12%
    n Semiannual
    31-Dec

    30-Jun

    31-Dec
    Description Ref Dr Cr
    Cash 5376150
    Bonds Payable 5376150

    Interest Expense (5,376,150 * 12% * 6/12) 322569


    Bonds Payable 2431
    Cash (5,000,000 * 13% * 6/12) 325000

    Interest Expense [(5,376,150 - 2431) *12% *6/12)] 322423.1


    Bonds Payable 2576.86
    Cash 325000

    Interest Expense [(5,376,150-2431-2576,86)*12%* 6/12 322268.5


    Bonds Payable 2731.472
    Cash 325000
    b. Non Current Liabilities
    Bonds Payable 5368411

    c. Interest Expense June 30, 2022 322423.1


    Interest Expense Dec 31, 2022 322268.5
    Total 644691.7

    Total Interest 13000000


    Less : Premium on Bonds 376150
    Total Cost 12623850
    Bonds Payable 800000
    FV 12%
    MV 10%
    n 5
    MV 860651.79 Date Cash Paid Interest Expense Amortized Premium
    1-Jan
    31-Dec 96000 86065.179 9934.821
    31-Dec 96000 85071.6969 10928.3031
    31-Dec 96000 83978.86659 12021.13341
    Date Description Ref Dr Cr
    1-Jan Cash 860651.8
    Bonds Payable 860651.8

    Book Value 31-Dec Interest Expense 86065.18


    860651.79 Bonds Payable 9934.821
    850716.969 Cash 96000
    839788.6659
    827767.5325 31-Dec Interest Expense 83978.87
    Bonds Payable 12021.13
    Cash 96000
    a. 1
    The selling price of the bonds will be the present value of all expected
    future net cash flows discounted at an actual annual interest rate (yield) of
    11%. Present value is the sum of the present value of the amount at
    maturity (face value) plus the present value of a series of future semi-
    annual interest payments.

    2 Cash Increase
    Non Current Liabilities Increase

    b. Interest Expense

    c. The amount of bond discount amortization would be lower in the second year of the life of the
    bond issue.

    d. The retirement of the bonds would result in a loss from extinguishment of debt that should be
    included in the determination of net income and classified as an Other income and expense item
    ear of the life of the

    debt that should be


    ome and expense item

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