Questions from Intermediate Accounting


Q: On August 1, 2021, Limbaugh Communications issued $30 million

On August 1, 2021, Limbaugh Communications issued $30 million of 10% nonconvertible bonds at 104. The bonds are due on July 31, 2041. Each $1,000 bond was issued with 20 detachable stock warrants, eac...

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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...

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Q: The Bradford Company issued 10% bonds, dated January 1,

The Bradford Company issued 10% bonds, dated January 1, with a face amount of $80 million on January 1, 2021. The bonds mature on December 31, 2030 (10 years). For bonds of similar risk and maturity,...

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Q: On January 1, 2021, Rapid Airlines issued $200 million

On January 1, 2021, Rapid Airlines issued $200 million of its 8% bonds for $184 million. The bonds were priced to yield 10%. Interest is payable semiannually on June 30 and December 31. Rapid Airlines...

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Q: On January 1, 2021, Essence Communications issued $800,

On January 1, 2021, Essence Communications issued $800,000 of its 10-year, 8% bonds for $700,302. The bonds were priced to yield 10%. Interest is payable semiannually on June 30 and December 31. Essen...

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Q: This exercise is a continuation of BE 9–11. During

This exercise is a continuation of BE 9–11. During 2022, purchases at cost and retail were $168,000 and $301,000, respectively. Net markups, net markdowns, and net sales for the year...

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Q: On March 1, 2021, Brown-Ferring Corporation issued $

On March 1, 2021, Brown-Ferring Corporation issued $100 million of 12% bonds, dated January 1, 2021, for $99 million (plus accrued interest). The bonds mature on December 31, 2040, and pay interest se...

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Q: At January 1, 2021, Transit Developments owed First City Bank

At January 1, 2021, Transit Developments owed First City Bank Group $600,000, under an 11% note with three years remaining to maturity. Due to financial difficulties, Transit was unable to pay the pre...

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Q: At January 1, 2021, Brainard Industries, Inc., owed

At January 1, 2021, Brainard Industries, Inc., owed Second BancCorp $12 million under a 10% note due December 31, 2023. Interest was paid last on December 31, 2019. Brainard was experiencing severe fi...

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Q: At January 1, 2021, NCI Industries, Inc. was

At January 1, 2021, NCI Industries, Inc. was indebted to First Federal Bank under a $240,000, 10% unsecured note. The note was signed January 1, 2014, and was due December 31, 2022. Annual interest wa...

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