Question: 1. Prepare the journal entry to record

> Refer to the bond details in Problem 10-4B. Required 1. Prepare the January 1 journal entry to record the bonds’ issuance. 2. Determine the total bond interest expense to be recognized over the bonds’ life. 3. Prepare an effective interest amortization t

> On October 1, 2020, Gordon borrows $150,000 cash from a bank by signing a three-year installment note bearing 10% interest. The note requires equal payments of $60,316 each year on September 30. Required 1. Complete an amortization table for this install

> Gomez issues $240,000 of 6%, 15-year bonds dated January 1, 2020, that pay interest semiannually on June 30 and December 31. They are issued at $198,494 when the market rate is 8%. Required 1. Prepare the January 1 journal entry to record the bonds’ issu

> Allegiant issues 6%, 20-year bonds with a par value of $2,000,000 and semiannual interest payments. In each separate situation, determine whether the bond is issued at par value, at a discount, or at a premium. 1. Market rate for the bond is 5%. 2. Marke

> Ripkin Company issues 9%, five-year bonds dated January 1, 2020, with a $320,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $332,988. Their annual market rate is 8% on the issue date. Required 1. Calculate t

> Refer to the bond details in Problem 10-1B, except assume that the bonds are issued at a price of $4,192,932. Required 1. Prepare the January 1 journal entry to record the bonds’ issuance. 2. For each semiannual period, compute (a) the cash payment, (b)

> Romero issues $3,400,000 of 10%, 10-year bonds dated January 1, 2020, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,010,000. Required 1. Prepare the January 1 journal entry to record the bonds’ issuance.

> Wixi Co. has the following equity investments in FSN, DELL, and ATI. (1) Which of these companies are subsidiaries of Wixi? (2) How are individual assets and liabilities of a parent and its subsidiary (ies) reported on a balance sheet? FSN stock: Wixi ow

> Refer to the lease details in Problem 10-11A. Assume that this lease is classified as an operating lease instead of a finance lease. Required 1. Prepare the January 1 journal entry at the start of the lease to record any asset or liability. 2. Prepare th

> On January 1, Rogers (lessee) signs a three-year lease for machinery that is accounted for as a finance lease. The lease requires three $18,000 lease payments (the first at the beginning of the lease and the remaining two at December 31 of Year 1 and Yea

> Ike issues $180,000 of 11%, three-year bonds dated January 1, 2020, that pay interest semiannually on June 30 and December 31. They are issued at $184,566 when the market rate is 10%. Required 1. Prepare the January 1 journal entry to record the bonds’ i

> Refer to the bond details in Problem 10-3A. Required 1. Compute the total bond interest expense over the bonds’ life. 2. Prepare an effective interest amortization table like the one in Exhibit 10B.2 for the bonds’ life. 3. Prepare the journal entries to

> Refer to the bond details in Problem 10-4A. Required 1. Prepare the January 1 journal entry to record the bonds’ issuance. 2. Determine the total bond interest expense to be recognized over the bonds’ life. 3. Prepare an effective interest amortization t

> On November 1, 2020, Norwood borrows $200,000 cash from a bank by signing a five-year installment note bearing 8% interest. The note requires equal payments of $50,091 each year on October 31. Required 1. Complete an amortization table for this installme

> Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2020, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 when the market rate is 8%. Required 1. Prepare the January 1 journal entry to record the bonds’ i

> On January 1, Renewable Energy issues bonds that have a $20,000 par value, mature in eight years, and pay 12% interest semiannually on June 30 and December 31. 1. Prepare the journal entry for issuance assuming the bonds are issued at (a) 99 and (b) 1031

> Ellis Company issues 6.5%, five-year bonds dated January 1, 2020, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $255,333. The annual market rate is 6% on the issue date. Required 1. Calculate th

> Refer to the bond details in Problem 10-1A, except assume that the bonds are issued at a price of $4,895,980. Required 1. Prepare the January 1 journal entry to record the bonds’ issuance. 2. For each semiannual period, compute (a) the cash payment, (b)

> Ticker Services began operations in Year 1 and holds long-term investments in available-for-sale debt securities. The year-end cost and fair values for its portfolio of these investments follow. Prepare journal entries to record each year-end fair value

> On January 1, Harbor (lessee) signs a five-year lease for equipment that is accounted for as a finance lease. The lease requires five $10,000 lease payments (the first at the beginning of the lease and the remaining four at December 31 of Years 1, 2, 3,

> In each separate case, indicate whether the company has a finance lease or an operating lease. 1. The lessor retains title to the asset, and the lease term is 3 years on an asset that has a 10-year useful life. 2. The title is transferred to the lessee.

> Quatro Co. issues bonds dated January 1, 2020, with a par value of $400,000. The bonds’ annual contract rate is 13%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issu

> Stanford issues bonds dated January 1, 2020, with a par value of $500,000. The bonds’ annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuanc

> Selected accounts from WooHoo Co.’s adjusted trial balance for the year ended December 31 follow. Prepare the liabilities section of its classified balance sheet.

> Use the information in Exercise 10-12 to prepare the journal entries for Eagle to record the note’s issuance and each of the four payments.

> On January 1, 2020, Eagle Company borrows $100,000 cash by signing a four-year, 7% installment note. The note requires four equal payments of $29,523, consisting of accrued interest and principal on December 31 of each year from 2020 through 2023. Prepar

> On January 1, 2020, Shay Company issues $700,000 of 10%, 15-year bonds. The bonds sell for $684,250. Six years later, on January 1, 2026, Shay retires these bonds by buying them on the open market for $731,500. All interest is accounted for and paid thro

> Separately analyze transactions a and b from QS 10-2 by showing their effects on the accounting equation—specifically, identify the accounts and amounts (including + or −) for each transaction.

> Tyrell Company issued callable bonds with a par value of $10,000. The call option requires Tyrell to pay a call premium of $500 plus par (or a total of $10,500) to bondholders to retire the bonds. On July 1, Tyrell exercises the call option. The call opt

> Fivio Co. reports the following information. (1) Compute return on total assets for the current year and for 1 year ago. (2) Is Fivio more efficient or less efficient in using total assets to produce income in the cur- rent year versus 1 year ago?

> Quatro Co. issues bonds dated January 1, 2020, with a par value of $400,000. The bonds’ annual contract rate is 13%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issu

> Wookie Company issues 10%, five-year bonds, on January 1 of this year, with a par value of $200,000 and semiannual interest payments. Use the following bond amortization table and prepare journal entries to record (a) the issuance of bonds on January 1,

> Duval Co. issues four-year bonds with a $100,000 par value on January 1, 2020, at a price of $95,952. The annual contract rate is 7%, and interest is paid semiannually on June 30 and December 31. 1. Prepare a straight-line amortization table like Exhibit

> Tano Company issues bonds with a par value of $180,000 on January 1, 2020. The bonds’ annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuanc

> Brussels Enterprises issues bonds at par dated January 1, 2020, that have a $3,400,000 par value, mature in four years, and pay 9% interest semiannually on June 30 and December 31. 1. Record the entry for the issuance of bonds for cash on January 1. 2. R

> No-Toxic-Toys currently have $200,000 of equity and is planning an $80,000 expansion to meet increasing demand for its product. The company currently earns $50,000 in net income, and the expansion will yield $25,000 in additional income before any intere

> Compute the selling price of 10%, 15-year bonds with a par value of $240,000 and semiannual interest payments. The annual market rate for these bonds is 8%. Use present value tables B.1 and B.3 in Appendix B.

> Compute the selling price of 8%, 10-year bonds with a par value of $250,000 and semiannual interest payments. The annual market rate for these bonds is 10%. Use present value tables B.1 and B.3 in Appendix B.

> Select the description that best fits each term or phrase. A. Records and tracks the bondholders’ names. B. Is unsecured; backed only by the issuer’s credit standing. C. Has varying maturity dates for amounts owed. D. The legal contract between the issue

> Dunphy Company issued $10,000 of 6%, 10-year bonds at par value on January 1. Interest is paid semiannually each June 30 and December 31. Prepare the entries for (a) the issuance of the bonds and (b) the first interest payment on June 30.

> Prepare journal entries to record the following transactions and events of Kodax Company. Year 1 Jan.2 Purchased 30,000 shares of Grecco Co. common stock for $411,000 cash. Grecco has 90,000 shares of common stock outstanding, and its activities will be

> Identify whether stockholders’ equity would increase, decrease, or have no effect as a result of each separate transaction listed below. 1. A stock dividend equal to 30% of the previously outstanding shares is declared. 2. New shares of common stock are

> Anthem Co. has 100,000 shares authorized, 90,000 shares issued, and 20,000 shares of treasury stock. Determine the number of shares outstanding.

> For each transaction, determine the impact—increase, decrease, or no effect—on total assets, total liabilities, and total equity.

> Use the information in QS 11-13 to compute the dividends paid each year to each of the two classes of stockholders assuming that the preferred stock is cumulative.

> Green Planet Corp. has 5,000 shares of noncumulative 10% preferred stock with a $2 par value and 17,000 shares of common stock with a $0.01 par value. During its first two years of operation, Green Planet declared and paid the following total cash divide

> Review 30 to 60 minutes of financial news programming on television. Take notes on companies that are catching analysts’ attention. You might hear reference to over- and undervaluation of firms and to reports about PE ratios, dividend yields, and earning

> Assume that Eventbrite decides to launch a new website to market discount bookkeeping services to consumers. This chain, named Aladin, requires $500,000 of start-up capital. The founder con- tributes $375,000 of personal assets in return for 15,000 share

> Access the February 22, 2019, filing of the 2018 calendar-year 10-K report of McDonald’s (Ticker: MCD) from SEC.gov. Required 1. Review McDonald’s balance sheet and identify how many classes of stock it has issued. 2. What are the par values, number of a

> Teams are to select an industry, and each team member is to select a different company in that industry. Each team member then is to acquire the selected company’s financial statements (or Form 10-K) from the SEC site (SEC.gov). Use these data to identif

> Prepare journal entries to record the following transactions involving both the short-term and long-term investments of Cancun Corp., all of which occurred during the current year. a. On February 15, paid $160,000 cash to purchase GMI’s 90-day short-term

> Refer to the financial statements for Samsung in Appendix A. How much were its cash payments for treasury stock acquisitions for the year ended December 31, 2018?

> Refer to the 2018 balance sheet for google in Appendix A. What is the par value per share of its preferred stock? Suggest a rationale for the amount of par value it assigned.

> Refer to Apple’s fiscal 2018 balance sheet in Appendix A. How many shares of common stock are authorized? How many shares of common stock are issued and outstanding?

> Use the following financial information for Samsung. Required 1. Compute earnings per share (EPS) for Samsung. 2. If Samsung buys back outstanding shares from investors, would we expect EPS to increase or decrease from the buyback?

> Use the following comparative figures for Apple and Google. Required 1. Compute the basic EPS for each company using these data. 2. Compute the dividend yield for each company using these data. 3. Compute the price-earnings ratio for each company using t

> Use Apple’s financial statements in Appendix A to answer the following. 1. How many shares of Apple common stock are issued and outstanding at (a) September 29, 2018, and (b) September 30, 2017? 2. What is the total amount of cash dividends paid to commo

> Santana Rey created Business Solutions on October 1, 2020. The company has been successful, and Santana plans to expand her business. She believes that an additional $86,000 is needed and is investigating three funding sources. a. Santana’s sister Cicely

> Soltech Company’s balance sheet shows the following stockholders’ equity section. Required 1. Determine the par values of the corporation’s preferred stock and its common stock. 2. If two yearsâ

> The equity sections for Hovo Corp. at the beginning of the year (January 1) and end of the year (December 31) follow. The following transactions and events affected its equity during the year. Feb. 15 declared a $0.40 per share cash dividend, date of rec

> Indicate whether each of the following statements regarding dividends is true or false. 1. Cash and stock dividends reduce retained earnings. 2. Dividends payable is recorded at the time a cash dividend is declared. 3. The date of record is the date a ca

> Carlsville Company began operations in the current year and had no prior stock investments. The following transactions are from its short-term stock investments with insignificant influence. Prepare journal entries to record these transactions. On Decemb

> Raphael Corporation’s balance sheet shows the following stockholders’ equity section. Required 1. Determine the par values of the corporation’s preferred stock and its common stock. 2. If two years&a

> Kohler Corporation reports the following components of stockholders’ equity at December 31, 2019. During 2020, the following transactions affected its stockholders’ equity accounts. Jan.Purchased 4,000 shares of its

> The following information is from Amos Company for the year ended December 31, 2020. Prepare a statement of retained earnings for Amos Company. Retained earnings at December 31, 2019 (before discovery of error), $1,375,000. Cash dividends declared and p

> Prepare a statement of retained earnings for Tidal Co. for the year ended December 31, 2020, using the following data.

> Tuscan Inc. had a retained earnings balance of $60,000 at December 31, 2019. During the year, Tuscan had the following selected transactions. Calculate the retained earnings balance at December 31, 2020. Reported net income of $100,000. Revised an estima

> Prepare a classified balance sheet for Tucson Co. for the year ended December 31 using the following data.

> In Draco Corporation’s first year of business, the following transactions affected its equity accounts. Prepare the stockholders’ equity section of Draco’s balance sheet as of December 31. Issued 4,000 shares of $2 par value common stock for $18. It auth

> Use the data in Exercise 11-12 to determine the amount of dividends paid each year to each of the two classes of stockholders assuming that the preferred stock is cumulative. Also determine the total dividends paid to each class for the four years combin

> Match each description with the characteristic of preferred stock that it best describes. A. Cumulative B. Noncumulative C. Nonparticipating D. Participating 1. Receives current and all past dividends before common stockholders receive any dividends. 2

> Refer to the information in Exercise 11-8. Assume that instead of distributing a stock dividend, Sharper did a 3-for-1 stock split. After the split, (1) prepare the updated stockholders’ equity section and (2) compute the number of shares outstanding. Hi

> Refer to the information in Exercise C-10. (1) After the fair value adjustment is made, prepare the assets section of Mars Co.’s December 31 classified balance sheet. Assume Mars plans to sell its stock investments within the next six months. (2) In whic

> Prepare Hertog Company’s journal entries to record the following transactions for the current year. May 7 Purchases Kraft bonds as a short-term investment in trading securities at a cost of $10,300. June 6 Sells its entire investment in Kraft bonds for

> Belkin Inc. has 100,000 shares of $3 par value common stock outstanding. Belkin declares a 40% stock dividend on March 2 when the stock’s market value is $72 per share. Prepare the journal entry for declaration of the stock dividend.

> On June 30, Sharper Corporation’s stockholders’ equity section of its balance sheet appears as follows before any stock dividend or split. Sharper declares and immediately distributes a 50% stock dividend. After the di

> For each dividend and stock split issued, determine the impact—increase, decrease, or no effect—on total assets, total liabilities, and total equity.

> Analyze each transaction from Exercise 11-4 by showing its effect on the accounting equation— specifically, identify the accounts and amounts (including + or −) for each transaction.

> Indicate which activities of Stockton Corporation violated the rights of a stockholder who owned one share of common stock. 1. Did not allow the stockholder to sell the stock to her brother. 2. Rejected the stockholder’s request to be put in charge of it

> Match each corporate characteristic 1 through 8 with the description that best relates to it. 1. Owner authority and control 2. Ease of formation 3. Transferability of ownership 4. Ability to raise large capital amounts 5. Duration of life 6. Owner liabi

> Foxburo Company expects to pay a $2.34 per share cash dividend this year on its common stock. The current market value of Foxburo stock is $32.50 per share. Compute the expected dividend yield. If a competitor with a dividend yield of 3% is considered an

> Compute Topp Company’s price-earnings ratio if its common stock has a market value of $20.54 per share and its EPS is $3.95. Its key competitor, Lower Deck, has a PE ratio of 9.5. For which company does the market have higher expectations of future perfo

> On January 1, Payson Inc. had a retained earnings balance of $20,000. During the year, Payson reported net income of $30,000 and paid cash dividends of $17,000. Calculate the retained earnings balance at its December 31 year-end.

> For each situation, identify whether it is treated as a prior period adjustment or change in accounting estimate. 1. A review of notes payable discovers that three years ago the company reported the entire amount of a payment (principal and interest) on

> On December 31, Mars Co. had the following portfolio of stock investments with insignificant influence. Mars had no stock investments in prior periods. Prepare the December 31 adjusting entry to report these investments at fair value.

> On December 31, Westworld Inc. has the following equity accounts and balances: Retained Earnings, $45,000; Common Stock, $1,000; Treasury Stock, $2,000; Paid-In Capital in Excess of Par Value, Com- mon Stock, $39,000; Preferred Stock, $7,000; and Paid-In

> Epic Inc. has 10,000 shares of $2 par value common stock outstanding. Epic declares a 5% stock dividend on July 1 when the stock’s market value is $8 per share. The stock dividend is distributed on July 20. Prepare journal entries for (a) declaration and

> Refer to the data in QS 12-7. Furniture costing $55,000 is sold at its book value in 2020. Acquisitions of furniture total $45,000 cash, on which no depreciation is necessary because it is acquired at year-end. What is the cash inflow from the sale of fu

> Refer to the balance sheet data in QS 12-10 from Anders Company. During 2020, a building with a book value of $70,000 and an original cost of $300,000 was sold at a gain of $60,000. 1. How much cash did Anders receive from the sale of the building? 2. Ho

> The plant assets section of the comparative balance sheets of Anders Company is reported below. Refer to the balance sheet data above from Anders Company. During 2020, equipment with a book value of $40,000 and an original cost of $210,000 was sold at a

> Indicate the effect each separate transaction has on investing cash flows. a. Sold a truck costing $40,000, with $22,000 of accumulated depreciation, for $8,000 cash. The sale results in a $10,000 loss. b. Sold a machine costing $10,000, with $8,000 of a

> Review the chapter’s opener involving Vera Bradley and its founder, Barbara Bradley. Required 1. In a business such as Vera Bradley, monitoring cash flow is always a priority. Explain how cash flow can lag behind net income. 2. What are potential sources

> Team members are to coordinate and independently answer one question within each of the following three sections. Team members should then report to the team and confirm or correct teammates’ answers. 1. Answer one of the following questions about the st

> Access the April 14, 2016, filing of the 10-K report (for year ending December 31, 2015) of Mendocino Brewing Company, Inc. (ticker: MENB) at SEC.gov. Required 1. Does Mendocino Brewing use the direct or indirect method to construct its consolidated stat

> Refer to Samsung’s 2018 statement of cash flows in Appendix A. List its cash flows from operating activities, investing activities, and financing activities.

> Analyze transactions (a through c) from Exercise C-8 by showing each transaction’s effect on the accounting equation—specifically, identify the accounts and amounts (including + or −) for each transaction.

> Refer to Google’s statement of cash flows in Appendix A. What are its cash flows from financing activities for the year ended December 31, 2018? List the items and amounts

> Refer to Apple’s statement of cash flows in Appendix A. (a) which method is used to compute its net cash provided by operating activities? (b) Its balance sheet shows an increase in accounts receivable from September 30, 2017, to September 29, 2018; wh

> Key comparative information for Samsung, Apple, and Google follows. Required 1. Compute the recent two years’ cash flow on total assets ratio for Samsung. 2. Is the change in Samsung’s cash flow on total assets ratio f

> Key figures for Apple and Google follow. Required 1. Compute the recent two years’ cash flow on total assets ratios for Apple and Google. 2. For the current year, which company has the better cash flow on total assets ratio? 3. For the