Questions from Intermediate Accounting

Q: On April 1, 2014, Seminole Company sold 15,000

On April 1, 2014, Seminole Company sold 15,000 of its 11%, 15-year, $1,000 face value bonds at 97. Interest payment dates are April 1 and October 1, and the company uses the straight-line method of...

Q: On December 31, 2014, Faital Company acquired a computer from

On December 31, 2014, Faital Company acquired a computer from Plato Corporation by issuing a $600,000 zero-interest-bearing note, payable in full on December 31, 2018. Faital Company’s credit...

Q: Sabonis Cosmetics Co. purchased machinery on December 31, 2013,

Sabonis Cosmetics Co. purchased machinery on December 31, 2013, paying $50,000 down and agreeing to pay the balance in four equal installments of $40,000 payable each December 31. An assumed interes...

Q: Presented on the next page are four independent situations.(

Presented on the next page are four independent situations. (a) On March 1, 2015, Wilke Co. issued at 103 plus accrued interest $4,000,000, 9% bonds. The bonds are dated January 1, 2015, and pay in...

Q: Samantha Cordelia, an intermediate accounting student, is having difficulty amortizing

Samantha Cordelia, an intermediate accounting student, is having difficulty amortizing bond premiums and discounts using the effective-interest method. Furthermore, she cannot understand why GAAP requ...

Q: What is the “call” feature of a bond issue?

What is the “call” feature of a bond issue? How does the call feature affect the amortization of bond premium or discount?  

Q: Daniel Perkins is the sole shareholder of Perkins Inc., which is

Daniel Perkins is the sole shareholder of Perkins Inc., which is currently under protection of the U.S. bankruptcy court. As a “debtor in possession,” he has negotiated the following rev...

Q: Distinguish between a current liability, such as accounts payable, and

Distinguish between a current liability, such as accounts payable, and a provision.

Q: Halvor Corporation is having financial difficulty and therefore has asked Frontenac National

Halvor Corporation is having financial difficulty and therefore has asked Frontenac National Bank to restructure its $5 million note outstanding. The present note has 3 years remaining and pays a cu...

Q: Crocker Corp. owes D. Yaeger Corp. a 10-

Crocker Corp. owes D. Yaeger Corp. a 10-year, 10% note in the amount of $330,000 plus $33,000 of accrued interest. The note is due today, December 31, 2014. Because Crocker Corp. is in financial tro...