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Bonds. Short Problem 1 and 2 P97 667 P990 000 Short Problem 3 P2 245 704 P2 154296 P2 400 000.

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Presentation on theme: "Bonds. Short Problem 1 and 2 P97 667 P990 000 Short Problem 3 P2 245 704 P2 154296 P2 400 000."— Presentation transcript:

1 Bonds

2 Short Problem 1 and 2 P P

3 Short Problem 3 P P P

4 Short Problem 4 and 5 P 645 Gain: P51 200

5 Short Problem 6 and 7 Gain: P Gain: P8 000

6 Short Problem 8 and 9 Answers at the next slides…

7 Problem 8 July 1 19x9 Debit: Bond Interest Expense 3800 Bonds Payable Loss on Retirement of Bonds Payable 6200 Credit: Discount on Bonds Payable ( ) 5000 Cash ( ) July 1 19x9 Debit: Bond Interest Expense 3800 Bonds Payable Loss on Retirement of Bonds Payable 6200 Credit: Discount on Bonds Payable ( ) 5000 Cash ( )

8 Problem 9a – Issuer’s Book April 1 19x2 Debit: Bond Interest Expense Bond Interest Payable Premium on Bonds Payable ( ) 3133 Credit: Cash 4000 Common Stock APIC: Common Stock April 1 19x2 Debit: Bond Interest Expense Bond Interest Payable Premium on Bonds Payable ( ) 3133 Credit: Cash 4000 Common Stock APIC: Common Stock

9 Problem 9a – Investor’s Book April 1 19x2 Debit: Cash Credit: Bond Interest Revenue Bond Interest Receivable Investment on Bonds 200 April 1 19x2 Debit: Cash Credit: Bond Interest Revenue Bond Interest Receivable Investment on Bonds 200

10 Problem 9b – Issuer’s Book April 1, 19x2 Debit: Interest Payable Interest Expense Premium on Bonds Payable ( ) 2178 Bonds Payable Credit: Cash Common Stocks APIC: Common Stocks April 1, 19x2 Debit: Interest Payable Interest Expense Premium on Bonds Payable ( ) 2178 Bonds Payable Credit: Cash Common Stocks APIC: Common Stocks

11 Problem 9b – Investor’s Book April 1, 19x2 Debit: Cash Investment on Stocks Credit: Interest Receivable Interest Revenue Investment on Bonds ( ) April 1, 19x2 Debit: Cash Investment on Stocks Credit: Interest Receivable Interest Revenue Investment on Bonds ( )

12 Short Problem 10 and 11 P P

13 Problem 10a April 1, 19x6 Cash Premium on Bonds Payable Bonds Payable October 1, 19x6 Interest Payable Cash April 1, 19x7 Interest Expense Premium on Bonds Payable Cash April 1, 19x6 Cash Premium on Bonds Payable Bonds Payable October 1, 19x6 Interest Payable Cash April 1, 19x7 Interest Expense Premium on Bonds Payable Cash

14 Short Problem 12 and 13 P Gain:

15 Short Problem 14 and 15 A B P

16 Short Problem 16 P

17 Long Problem 1

18

19 LP 1 – Requirement 1c Jan 31, 2004 Cash Premium on Bonds Payable Bonds Payable July 31, 2004 Interest Expense Premium on Bonds Payable Cash December 31, 2004 Interest Expense Premium on Bonds Payable Interest Payable Jan 31, 2004 Cash Premium on Bonds Payable Bonds Payable July 31, 2004 Interest Expense Premium on Bonds Payable Cash December 31, 2004 Interest Expense Premium on Bonds Payable Interest Payable

20 LP 1 – Requirement 2 Jan 31, 2004 Cash Notes Payable Dec 31, 2004 Interest Expense Interest Payable Jan 31, 2005 Interest Payable Interest Expense Notes Payable Cash Jan 31, 2004 Cash Notes Payable Dec 31, 2004 Interest Expense Interest Payable Jan 31, 2005 Interest Payable Interest Expense Notes Payable Cash

21 Long Problem

22 LP 2a May 1, 19x6 Cash Discount on Bonds Payable Bonds Payable Nov 1, 19x6 Interest Payable Cash May 1, 19x7 Interest Expense Discount on Bonds Payable Cash May 1, 19x6 Cash Discount on Bonds Payable Bonds Payable Nov 1, 19x6 Interest Payable Cash May 1, 19x7 Interest Expense Discount on Bonds Payable Cash

23 Long Problem 3

24 LP 3 Retirement Apr 30 20x4 Bonds Payable Loss on Calling Bonds Discount on Bonds Payable Cash Issuance Mar 30 20x4 Cash Premium on Bonds Payable Bonds Payable Retirement Apr 30 20x4 Bonds Payable Loss on Calling Bonds Discount on Bonds Payable Cash Issuance Mar 30 20x4 Cash Premium on Bonds Payable Bonds Payable

25 Long Problem 4

26 LP 4 – Issuer’s Book Dec 31, 20x5 Interest Expense Discount on Bonds Payable Interest Payable Feb 1, 20x6 Interest Expense Interest Payable Discount on Bonds Payable 179 Cash Bonds Payable Discount on Bonds Payable APIC: Common Stock Common Stocks Dec 31, 20x5 Interest Expense Discount on Bonds Payable Interest Payable Feb 1, 20x6 Interest Expense Interest Payable Discount on Bonds Payable 179 Cash Bonds Payable Discount on Bonds Payable APIC: Common Stock Common Stocks

27 LP 4 – Investor’s Book Dec 31, 20x5 Investment in Bonds Interest Receivable Interest Revenue Feb 1, 20x6 Cash Investment on Bonds 179 Interest Revenue Interest Receivable Investment in Stocks Investment in Bonds Dec 31, 20x5 Investment in Bonds Interest Receivable Interest Revenue Feb 1, 20x6 Cash Investment on Bonds 179 Interest Revenue Interest Receivable Investment in Stocks Investment in Bonds

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