Sikes Corporation, whose annual accounting period ends on December 31, issued th

Question

Sikes Corporation, whose annual accounting period ends on December 31, issued the following bonds Date of bonds: January 1, 2015 Maturity amount and date: $250,000 due in 10 years (December 31, 2024) Interest: 10 percent per year payable each December 31 Date issued: January 1, 2015 1. For each of the three independent cases that follow, provide the following amounts to be reported on the January 1, 2015, financial statements immediately after the bonds are issued. TIP: See Exhibit 10.5 for an illustration distinguishing Bonds Payable from their carrying value. (Negative amounts should be indicated with a minus sign.) Case A Case B January 1, 2015-Financial statements: (issued at 100)(at 95) Case C r9o (at 103) a. Bonds payable b. Unamortized premium (or discount) c. Carrying value

Explanation / Answer

Case A Case B Case C Bonds payable 250000 250000 250000 Unamortized premium(discount) 0 -12500 7500 Carrying value 250000 237500 257500

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