Questions from Intermediate Accounting

Q: Collins Corporation bought a computer on December 31, 2017, paying

Collins Corporation bought a computer on December 31, 2017, paying $30,000 down with a further $75,000 payment due on December 31, 2020. An interest rate of 10% is implicit in the purchase price. Coll...

Q: Kanish Corporation’s general ledger includes the following account balances:

Kanish Corporation’s general ledger includes the following account balances: The Contributed Surplus account arose from net excess of proceeds over cost on a previous cancellation...

Q: On January 1, 2017, Osborn Inc. sold 12%

On January 1, 2017, Osborn Inc. sold 12% bonds having a maturity value of $800,000 for $860,652, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2017 and mature on Janu...

Q: Refer to the data and other information provided for Wong Corporation in

Refer to the data and other information provided for Wong Corporation in E20-15. Assume that the equipment has an estimated economic life of seven years and that its fair value on September 1, 2017 is...

Q: Cinderella Shoes Inc. is having difficulty meeting its working capital requirements

Cinderella Shoes Inc. is having difficulty meeting its working capital requirements. As a result, on January 1, 2017, the company sold bonds with a face value of $1 million, receiving $800,000 in cash...

Q: Minor Inc. sells 10% bonds having a maturity value of

Minor Inc. sells 10% bonds having a maturity value of $3 million for $2,783,713. The bonds are dated January 1, 2017 and mature on January 1, 2022. Interest is payable annually on January 1. Instruct...

Q: Four independent situations follow. 1. Wen Corporation incurred the

Four independent situations follow. 1. Wen Corporation incurred the following costs when it issued bonds: printing and engraving costs, $25,000; legal fees, $69,000; and commissions paid to underwrite...

Q: On June 30, 2017, Mosca Limited issued $4 million

On June 30, 2017, Mosca Limited issued $4 million of 20-year, 13% bonds for $4,300,920, which provides a yield of 12%. The company uses the effective interest method to amortize any bond premium or di...

Q: Friedman Corporation had bonds outstanding with a maturity value of $500

Friedman Corporation had bonds outstanding with a maturity value of $500,000. On April 30, 2017, when these bonds had an unamortized discount of $10,000, they were called in at 104. To pay for these b...

Q: On June 30, 2010, Auburn Limited issued 12% bonds

On June 30, 2010, Auburn Limited issued 12% bonds with a par value of $800,000 due in 20 years. They were issued at 98 and were callable at 104 at any date after June 30, 2017. Because of lower intere...