Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 9.41Q
To determine
To identify: The correct option related to recording of interest expense.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
The following section is taken from Crane's balance sheet at December 31, 2021.
Current liabilities
Interest payable
Long-term liabilities
Bonds payable (8%, due January 1, 2025)
(a)
Interest is payable annually on January 1. The bonds are callable on any annual interest date.
(b)
Journalize the payment of the bond interest on January 1, 2022. (Credit account titles are automatically indented when amount is
entered. Do not indent manually.)
Date
Jan. 1,
2022
eTextbook and Media
List of Accounts
Save for Later
$33,000
412,500
Account Titles and Explanation
Date Account Titles and Explanation
Jan. 1,
2022
Debit
Attempts: 0 of 5 used
Assume that on January 1, 2022, after paying interest, Crane calls bonds having a face value of $165,000. The call price is 101.
Record the redemption of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually)
Debit
Credit
Submit Answer
Credit
Requirements-
Journalize the following transactions for Zillow. Include an explanation for each entry.
A. Issuance of the bonds payable at par on July 1, 2018
B. Accrual of interest expense on December 31,2018
C. Payments of cash interest on January 1, 2019
D. Payments of the bonds payable at maturity (give the date)
Record debuts first then credits. Select explanation on last line of journal entry table. See picture below.
In the preceding problem, what is the carrying amount of the note payable on December 31, 2020?
In the preceding problem, what is the equity of the assignor in assigned accounts on December 31, 2020?
Chapter 9 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 9 - Brownlee Company issued 525,000, 8%, six-year...Ch. 9 - A bond with a face value of 250,000 and a quoted...Ch. 9 - Mission Furniture issued 500,000 in bonds payable...Ch. 9 - Bonds with an 8% stated interest rate were issued...Ch. 9 - Brimfest Corporation issued 2,400,000, 10-year, 6%...Ch. 9 - The Discount on Bonds Payable account a.is an...Ch. 9 - The discount on a bond payable becomes...Ch. 9 - The carrying value of Bonds Payable equals a.Bonds...Ch. 9 - Prob. 9QCCh. 9 - Prob. 10QC
Ch. 9 - Prob. 11QCCh. 9 - When a company retires bonds early, the gain or...Ch. 9 - Which type of lease will not increase a companys...Ch. 9 - Prob. 14QCCh. 9 - The debt ratio is calculated by dividing: a. total...Ch. 9 - Prob. 16QCCh. 9 - Prob. 17QCCh. 9 - Prob. 9.1ECCh. 9 - Prob. 9.1SCh. 9 - (Learning Objective 1: Determine bond prices at...Ch. 9 - (Learning Objective 1: Journalize basic bond...Ch. 9 - Prob. 9.4SCh. 9 - Prob. 9.5SCh. 9 - Prob. 9.6SCh. 9 - Prob. 9.7SCh. 9 - Prob. 9.8SCh. 9 - (Learning Objective 2: Account for bonds payable...Ch. 9 - Prob. 9.10SCh. 9 - LO 4,5 (Learning Objectives 4, 5: Deferred income...Ch. 9 - LO 5 (Learning Objective 5: Compute and evaluate...Ch. 9 - LO 5 (Learning Objective 5: Calculate the leverage...Ch. 9 - LO 6 (Learning Objective 6: Report liabilities)...Ch. 9 - (Learning Objective 1: Issue bonds payable...Ch. 9 - Prob. 9.16AECh. 9 - Prob. 9.17AECh. 9 - LO 2 (Learning Objective 2: Issue bonds payable...Ch. 9 - Prob. 9.19AECh. 9 - LO 4 (Learning Objective 4: Account for deferred...Ch. 9 - (Learning Objective 5: Evaluate debt-paying...Ch. 9 - LO 4, 5 (Learning Objectives 4, 5: Analyze current...Ch. 9 - Prob. 9.23AECh. 9 - (Learning Objective 1: Issue bonds payable...Ch. 9 - Prob. 9.25BECh. 9 - Prob. 9.26BECh. 9 - Prob. 9.27BECh. 9 - Prob. 9.28BECh. 9 - LO 4 (Learning Objective 4: Account for deferred...Ch. 9 - Prob. 9.30BECh. 9 - Prob. 9.31BECh. 9 - Prob. 9.32BECh. 9 - A bond with a face amount of 12,000 has a current...Ch. 9 - The carrying value on bonds equals Bends Payable...Ch. 9 - Prob. 9.35QCh. 9 - Prob. 9.36QCh. 9 - Prob. 9.37QCh. 9 - Prob. 9.38QCh. 9 - Prob. 9.39QCh. 9 - Prob. 9.40QCh. 9 - Prob. 9.41QCh. 9 - Prob. 9.42QCh. 9 - Prob. 9.43QCh. 9 - Prob. 9.44QCh. 9 - Prob. 9.45QCh. 9 - Prob. 9.46QCh. 9 - Prob. 9.47QCh. 9 - Prob. 9.48QCh. 9 - Prob. 9.49QCh. 9 - Prob. 9.50APCh. 9 - (Learning Objectives 1, 6: Issue bonds at a...Ch. 9 - Prob. 9.52APCh. 9 - Prob. 9.53APCh. 9 - (Learning Objectives 2, 3, 6: Issue convertible...Ch. 9 - Prob. 9.55APCh. 9 - Prob. 9.56BPCh. 9 - Prob. 9.57BPCh. 9 - Prob. 9.58BPCh. 9 - Prob. 9.59BPCh. 9 - (Learning Objectives 2, 3, 6: Issue convertible...Ch. 9 - (Learning Objectives 4, 5, 6: Report liabilities...Ch. 9 - Prob. 9.62CEPCh. 9 - Prob. 9.63CEPCh. 9 - Prob. 9.64SCCh. 9 - (Learning Objective 5: Explore an actual...Ch. 9 - Prob. 1FF
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 1. What is the interest income to be reported from the note of Company A in the income statement for the year ended, December 31, 2020? 2. On December 31, 2020, what is the carrying value of the note received from Company A? 3. What should have been the ENTRY to record the receipt of note from Company B on October 1, 2020?arrow_forwardDonna Clark Company issued $612,000 of 9%, 20-year bonds on January 1, 2025, at 101. Interest is payable semiannually on July 1 and January 1. Clark Company uses the straight-line method of amortization for bond premium or discount. Prepare the journal entries to record the following.arrow_forwardOn an entity’s April 30,2021 balance sheet a note receivable was reported as a noncurrent asset and its accrued interest for eight months was reported as a current asset. Which of the following terms would fit the entity’s note receivable? A. Principal and interest are due December 31, 2021. B. Principal is due August 31,2022, and interest is due August 31, 2021, and August 31, 2022. C. Both principal and interest amounts are payable on December 31, 2021 and December 31, 2022. D. Both principal and interest amounts are payable on August31, 2021, and August 31, 2022.arrow_forward
- Requirements1. Journalize the following transactions of Laporte Communications, Inc.: 2. At December 31, 2018, after all year-end adjustments have been made, determine thecarrying amount of Laporte’s bonds payable, net. 3. For the six months ended July 1, 2018, determine the following for Laporte:a. Interest expenseb. Cash interest paidWhat causes interest expense on the bonds to exceed cash interest paid?arrow_forwardwhat is the carrying amount of the note payable on December 31, 2020? what is the equity of the assignor in assigned accounts on December 31, 2020?arrow_forwardhe following items are included in the financial statement of ABC BHD for 2019: Instruction: 1. Compute the net profit for the year. 2. What is the retained earnings figure that would appear on the balance sheet at December 31, 2019? 3. Prepare a classified balance sheet for ABC BHD at December 31, 2019,assuming the note payable is a long-term debtarrow_forward
- Required: 1. Prepare the appropriate journal entries for the deposits received, returned, and forfeited during 2021. 2. Determine the liability for refundable deposits to be reported on the December 31, 2021, balance sheet.arrow_forwardOn September 30, 2012, Cullumber Company issued 10% bonds with a par value of $460,000 due in 20 years. They were issued at 98 and were callable at 105 at any date after September 30, 2017. Because Cullumber Company was able to obtain financing at lower rates, it decided to call the entire issue on September 30, 2018, and to issue new bonds. New 9% bonds were sold in the amount of $780,000 at 102; they mature in 20 years. Cullumber Company uses straight-line amortization. Interest payment dates are March 31 and September 30.arrow_forwardIn Leni Company's December 31, 2021 statement of financial position, a note receivable was reported as a non-current asset and its accrued interest for five months was reported as a current asset. Which of the following terms would fit Leni Company's note receivable? a. Both principal and accrued interest amounts are payable on July 31, 2022 and July 31, 2023. b. Both principal and interest are due on July 31, 2023. c. Interest is due on July 31, 2022 and July 31, 2023 and principal is due on July 31, 2023. d. Accrued interest is due on December 31, 2021 and principal is due on July 31, 2023.arrow_forward
- Based on the given, these ar the requirements: How much should be reported as “Uncollectible Accounts Expense” in its fiscal year ending May 31, 2021 statement of comprehensive income? How much is the balance of the “Allowance for Uncollectible Accounts” to be reported in the Statement of Financial Position as at May 31, 2021? How much is the Amortized Cost/Net Realizable Value of the Accounts Receivable at May 31, 2021?arrow_forwardBlackmon Corporation’s December 31, 2018, balance sheet disclosed the following information relating to its receiVables: 1. Prepare the journal entries to record the preceding receivable transactions during 2019 and the necessary adjusting entry on December 31, 2019. Assume a 360-day year for interest calculations and round calculations to the nearest dollar. 2. Prepare the receivables portion of Blackmon’s December 31, 2019, balance sheet. 3. Next Level Compute Blackmon’s accounts receivable turnover in days, assuming a 360-day business year. what is your evaluation of its collection policies? 4. If Blackmon uses IFRS, what might be the heading of the section for the receivables reported in Requirement 2?arrow_forwardOn September 1, 2019, a company borrowed cash and signed a 1-year,interest-bearing note on which both the principal and interest arepayable on September 1, 2021. How will the note payable and the relatedinterest be classified in the December 31, 2019, balance sheet? Note Payable Accrued Interest a. Current liabilityb. Noncurrent liabilityc. Current liabilityd. Noncurrent liability Noncurrent liabilityCurrent liabilityCurrent liabilityNo entryarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
7.2 Ch 7: Notes Payable and Interest, Revenue recognition explained; Author: Accounting Prof - making it easy, The finance storyteller;https://www.youtube.com/watch?v=wMC3wCdPnRg;License: Standard YouTube License, CC-BY