Hw\'9 HW 10#9: BONDS ISSUED AT DISCOUNT Renfro Co p nyissued $300,000 of g% 10-y
ID: 2566804 • Letter: H
Question
Hw'9 HW 10#9: BONDS ISSUED AT DISCOUNT Renfro Co p nyissued $300,000 of g% 10-year bonds at 92. Interests paid . annually, and the straight-line method is used for amortization. The bonds are issued on the date of the bonds. 10 POINTS a. What amount of cash was received for the bonds at issuance? $ b. How much interest is paid each interest period?s c. What is the discount amortization for each interest period? $ d. How much interest expense is recorded for each interest date? $ e. What is the carrying value of the bonds after the first interest date? $ Hw10#10: BALANCE SHEET REPORTING OF LONG-TERM LIABILITIES: The adjusted trial balance for Helton Corporation at December 31, 2017 contained the following accounts: 10 POINTSs W10. Current Assets Long-Term Assets $200,000 980,000 Bonds payable, 10% Interest payable Discount on bonds payable Notes payable, 9%, due 2021 Accounts payable $500,000 20,000 30,000 70,000 120,000 Instructions (a) What is the total of all current liabilities? $ (b) What is the total of all long-term liabilities? $- (c) What is the total of all liabilities? $- (d) What is the Debt to Assets Ratio? (e) Using the accounting equation, what is the Debt to Stockholders' Equity Ratio? Round to 3 decimals. Round to 3 decimals.Explanation / Answer
SOLUTION
S.no. 9
(1) Amount of cash received =
= $300,000 * 92% = $276,000
(2) Interest for each period =
= $300,000 * 8% = $24,000
(3) Discount amortization =
= ($300,000 - $276,000) / 10
= $24,000 / 10 = $2,400
(4) Interest expense=
=$24,000 + $2,400 = $26,400
(5) Carrying value =
= $276,000 + $2,400 = $278,400
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