Question 1 Downing company issues $4,000,000 6%, 5 year bonds

On January 1, 2014 Huber Co. sold 12% bonds with a face value of $1,000,000. The bonds mature in 5 years and interest is paid semiannually on June 30 and Dec 31. The bonds were sold for $ 1,077,250 to yield 10%. Using the effective interest method of amortization, interest expense for 2014 is

a) $100,000

b) $107,419

C) $107,700

d) $ 120,000

3

<pstyle=”background-color: rgb(255,=”” 255,=”” 255);=”” border:=”” 0px;=”” font-size:=”” 12px;=”” margin:=”” outline:=”” padding:=”” 0px=”” 0.8075em;=”” vertical-align:=”” baseline;=”” line-height:=”” 19.3799991607666px;=”” color:=”” rgb(51,=”” 51,=”” 51);=”” font-family:=”” verdana;”=””>At the beginning of 2014, Winston corporation issued 10% bonds with a face value of $ 2,000,000. These bonds mature in 5 years, and the interest is paid semiannually on June 30 and Dec 31. The bonds were sold for $ 1,852,800 to yield 12%. Winston uses a calendar year reporting period. Using the effective interest method amortization, what amount of interest expense should be reported for 2014? Round answera) $ 221, 667

b) $ 222, 333

c) $ 223, 006

d) $ 229, 440

4

<pstyle=”background-color: rgb(255,=”” 255,=”” 255);=”” border:=”” 0px;=”” font-size:=”” 12px;=”” margin:=”” outline:=”” padding:=”” 0px=”” 0.8075em;=”” vertical-align:=”” baseline;=”” line-height:=”” 19.3799991607666px;=”” color:=”” rgb(51,=”” 51,=”” 51);=”” font-family:=”” verdana;”=””>Manning company issued 10,000 shares of its $ 5 par value common stock having a fair value of $ 25 per share and 15,000 shares of its $15 par value preferred stock having a fair value of $ 20 per share for a lump sum of $ 530,000. How much of the proceeds would be allocated to the common stock?a) $ 250,000

b) $ 240,909

c) $ 289,091

d) $ 281,563

5

<pstyle=”background-color: rgb(255,=”” 255,=”” 255);=”” border:=”” 0px;=”” font-size:=”” 12px;=”” margin:=”” outline:=”” padding:=”” 0px=”” 0.8075em;=”” vertical-align:=”” baseline;=”” line-height:=”” 19.3799991607666px;=”” color:=”” rgb(51,=”” 51,=”” 51);=”” font-family:=”” verdana;”=””>On September 1, 2014. Valdez Company reacquire 20,000 shares of its $10 par value common stock for $ 15 per share. Valdez uses the cost method to account for treasury stock. The journal entry to record the reacquisition of the stock should debita) Treasury stock for $ 200,000

b) Common stock for $ 200,000

c) Common stock for $ 200,000 and paid in capital excess of par for $ 75,000.

d) Treasury stock for $ 300,000

6

<pstyle=”background-color: rgb(255,=”” 255,=”” 255);=”” border:=”” 0px;=”” font-size:=”” 12px;=”” margin:=”” outline:=”” padding:=”” 0px=”” 0.8075em;=”” vertical-align:=”” baseline;=”” line-height:=”” 19.3799991607666px;=”” color:=”” rgb(51,=”” 51,=”” 51);=”” font-family:=”” verdana;”=””>Long co issued 100,000 shares of $ 10 par common stock for $ 1,200,000. A year later Long acquire 12,000 shares of its won common stock at $15 per share. Three months later Long Sold 6,000 of these shares at $19 per share. If the cost method is used to record treasury stock transactions, to record the sale of the 6,000 treasury shares, Long should credita) Treasury stock for $ 114,000

b) Treasury stock for $ 60,000 and paid in capital from treasury stock for $ 54,000

c) Treasury stock for $ 90,000 and paid in capital from trausry stock for $ 24,000

c) Treasury stock for $ 90,000 and paid in capital excess of par for $ 24,ooo

</pstyle=”background-color:></pstyle=”background-color:></pstyle=”background-color:></pstyle=”background-color:>

Do you need an answer to this or any other questions?

Order Plagiarism Free Answer Here