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183)
On January 1, the Rodrigues Corporation leased some equipment on a 2-year lease, paying $15,000
per year each December 31. The lease is considered to be an operating lease. Prepare the general
journal entry to record the first lease payment on December 31.
184)
On January 1, Haymark Corporation leased a truck, agreeing to pay $15,252 every December 31 for
the six-year life of the lease. The present value of the lease payments, at 6% interest, is $75,000. The
lease is considered a capital lease.
(a) Prepare the general journal entry to record the acquisition of the truck with the capital lease.
(b) Prepare the general journal entry to record the first lease payment on December 31.
(c) Record straight-line depreciation on the truck on December 31, assuming a 6-year life and no
salvage value.
185)
Sharma Company's balance sheet reflects total assets of $250,000 and total liabilities of $150,000.
Calculate the company's debt-to-equity ratio.
186)
On July 1 of the current year a corporation issued (sold) $1,000,000 of its 12% bonds at par. The
bonds pay interest June 30 and December 31. What amount of bond interest expense should the
company report on its current year income statement?
187)
Johanna Corporation issued $3,000,000 of 8%, 20-year bonds payable at par value on January 1.
Interest is payable each June 30 and December 31.
(a) Prepare the general journal entry to record the issuance of the bonds on January 1.
(b) Prepare the general journal entry to record the first interest payment on June 30.
188)
A company issued 9%, 10-year bonds with a par value of $100,000. Interest is paid semiannually.
The market interest rate on the issue date was 10%, and the issuer received $95,016 cash for the
bonds. On the first semiannual interest date, what amount of cash should be paid to the holders of
these bonds for interest?
189)
On January 1, a company issued 10-year, 10% bonds payable with a par value of $500,000, and
received $442,647 in cash proceeds. The market rate of interest at the date of issuance was 12%.
The bonds pay interest semiannually on July 1 and January 1. The issuer uses the straight-line
method for amortization. Prepare the issuer's journal entry to record the first semiannual interest
payment on July 1.
190)
A company issued 10-year, 9% bonds, with a par value of $500,000 when the market rate was
9.5%. The issuer received $484,087 in cash proceeds. Prepare the issuer's journal entry to record
the bond issuance.
191)
A company issued 10-year, 9% bonds with a par value of $500,000 when the market rate was
9.5%. The company received $484,087 in cash proceeds. Using the straight-line method, prepare
the issuer's journal entry to record the first semiannual interest payment and the amortization of any
bond discount or premium.(Round amounts to the nearest whole dollar)
192)
A company issues 6%, 5 year bonds with a par value of $800,000 and semiannual interest payments.
On the issue date, the annual market rate of interest is 8%. Compute the issue (selling) price of the
bonds. The following information is taken from present value tables:
Present value of an annuity for 10 periods at 3% 8.5302
Present value of an annuity for 10 periods at 4% 8.1109
Present value of 1 due in 10 periods at 3%................... 0.7441
Present value of 1 due in 10 periods at 4% 0.6756
193)
A company issued 9.2%, 10-year bonds with a par value of $100,000. Interest is paid semiannually.
The annual market interest rate on the issue date was 10%, and the issuer received $95,016 cash for
the bonds. The issuer uses the effective interest method for amortization. On the first semiannual
interest date, what amount of discount should the issuer amortize?
194)
A company issued 10%, 10-year bonds with a par value of $1,000,000 on January 1, at a selling
price of $885,295 when the annual market interest rate was 12%. The company uses the effective
interest amortization method. Interest is paid semiannually each June 30 and December 31.
(1) Prepare an amortization table for the first two payment periods using the format shown below:
Semiannual
Cash
Bond
Interest
Interest
Interest
Discount
Unamortized
Carrying
Period
Paid
Expense
Amortization
Discount
Value
(2) Prepare the journal entry to record the first semiannual interest payment.
195)
A company issued 10-year, 9% bonds with a par value of $500,000 when the market rate was
9.5%. The company received $484,087 in cash proceeds. Using the effective interest method,
prepare the issuer's journal entry to record the first semiannual interest payment and the
amortization of any bond discount or premium.
196)
A company issued 10-year, 9% bonds with a par value of $500,000 when the market rate was
9.5%. The company received $484,087 in cash proceeds. Prepare the issuer's journal entry to
record the issuance of the bond.
197)
On January 1, a company issued 10%, 10-year bonds payable with a par value of $720,000. The
bonds pay interest on July 1 and January 1. The bonds were issued for $817,860 cash, which
provided the holders an annual yield of 8%. Prepare the journal entry to record the first semiannual
interest payment, assuming it uses the straight-line method of amortization.
198)
On January 1, a company issues 8%, 5-year, $300,000 bonds that pay interest semiannually each
June 30 and December 31. On the issue date, the annual market rate of interest is 6%. Compute the
price of the bonds on their issue date. The following information is taken from present value tables:
Present value of an annuity for 10 periods at
3%........
8.5302
Present value of an annuity for 10 periods at
4%........
8.1109
Present value of 1 due in 10 periods at
3%................
0.7441
Present value of 1 due in 10 periods at
4%................
0.6756
199)
On January 1, a company issues 8%, 5-year, $300,000 bonds that pay interest semiannually each
June 30 and December 31. On the issue date, the annual market rate of interest for the bonds is 10%.
Compute the price of the bonds on their issue date. The following information is taken from present
value tables:
Present value of an annuity for 10 periods at
4%
8.1109
Present value of an annuity for 10 periods at
5%
7.7217
Present value of 1 for 10 periods at 4%
0.6756
Present value of 1 for 10 periods at 5%
0.6139
200)
On January 1, a company issues 6%, 10 year $300,000 par value bonds that pay semiannual interest
each June 30 and December 31. The bonds sell at par value. Prepare the general journal entry to
record the issuance of the bonds on January 1.
201)
On April 1, a company issues 6%, 10-year, $600,000 par value bonds that pay interest
semiannually each March 31 and September 30. The bonds sold at $592,000. The company uses
the straight-line method of amortizing bond discounts. Prepare the general journal entry to record
the first interest payment on September 30.
202)
Strider Corporation issued 14%, 5-year bonds with a par value of $5,000,000 on January 1, Year 1.
Interest is to be paid semiannually on each June 30 and December 31. The bonds are issued at
$5,368,035 cash when the market rate for this bond is 12%.
(a) Prepare the general journal entry to record the issuance of the bonds on January 1, year 1.
(b) Show how the bonds would be reported on Strider's balance sheet at January 1, Year 1.
(c) Assume that Strider uses the effective interest method of amortization of any discount or premium
on bonds. Prepare the general journal entry to record the first semiannual interest payment on June
30, Year 1.
(d) Assume instead that Strider uses the straight-line method of amortization of any discount or
premium on bonds. Prepare the general journal entry to record the first semiannual interest
payment on June 30, Year 1.
203)
On January 1, a company issued 10%, 10-year bonds with a par value of $720,000. The bonds pay
interest each July 1 and January 1. The bonds were sold for $817,860 cash, based on an annual
market rate of 8%. Prepare the issuer's journal entry to record the first semiannual interest payment
assuming the effective interest method is used.
204)
A company issued 10%, 5-year bonds with a par value of $2,000,000, on January 1. Interest is to be
paid semiannually each June 30 and December 31. The bonds were sold at $2,162,290 based on an
annual market rate of 8%. The company uses the effective interest method of amortization.
(1) Prepare an amortization table for the first two semiannual payment periods using the format
shown below.
Semiannual
Cash
Bond
Interest
Interest
Interest
Premium
Unamortized
Carrying
Period
Paid
Expense
Amortization
Premium
Value
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