Questions from Intermediate Accounting

Q: On February 1, 2021, Strauss-Lombardi issued 9%

On February 1, 2021, Strauss-Lombardi issued 9% bonds, dated February 1, with a face amount of $800,000. The bonds sold for $731,364 and mature on January 31, 2041 (20 years). The market yield for bon...

Q: On March 1, 2021, Stratford Lighting issued 14% bonds

On March 1, 2021, Stratford Lighting issued 14% bonds, dated March 1, with a face amount of $300,000. The bonds sold for $294,000 and mature on February 28, 2041 (20 years). Interest is paid semiannua...

Q: Roberson Corporation uses a periodic inventory system and the retail inventory method

Roberson Corporation uses a periodic inventory system and the retail inventory method. Accounting records provided the following information for the 2021 fiscal year: The company records sales to empl...

Q: Federal Semiconductors issued 11% bonds, dated January 1, with

Federal Semiconductors issued 11% bonds, dated January 1, with a face amount of $800 million on January 1, 2021. The bonds sold for $739,814,813 and mature on December 31, 2040 (20 years). For bonds o...

Q: When companies offer new debt security issues, they publicize the offerings

When companies offer new debt security issues, they publicize the offerings in the financial press and on Internet sites. Assume the following were among the debt offerings reported in December 2021:...

Q: At the end of 2020, Majors Furniture Company failed to accrue

At the end of 2020, Majors Furniture Company failed to accrue $61,000 of interest expense that accrued during the last five months of 2020 on bonds payable. The bonds mature in 2034. The discount on t...

Q: Wilkins Food Products, Inc., acquired a packaging machine from Lawrence

Wilkins Food Products, Inc., acquired a packaging machine from Lawrence Specialists Corporation. Lawrence completed construction of the machine on January 1, 2019. In payment for the machine Wilkins i...

Q: Amber Mining and Milling, Inc., contracted with Truax Corporation to

Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2021. Amber paid for the lathe by i...

Q: 1. Prepare the journal entry on January 1, 2021,

1. Prepare the journal entry on January 1, 2021, for Truax Corporation’s sale of the lathe. Assume Truax spent $400,000 to construct the lathe. 2. Prepare an amortization schedule for the three-year t...

Q: FinanceCo lent $8 million to Corbin Construction on January 1,

FinanceCo lent $8 million to Corbin Construction on January 1, 2021, to construct a playground. Corbin signed a three-year, 6% installment note to be paid in three equal payments at the end of each ye...