10/21/2017 5 Get Out of Town Vacations signed a 12%, 10-year note for $181.000 T
ID: 2591941 • Letter: 1
Question
10/21/2017 5 Get Out of Town Vacations signed a 12%, 10-year note for $181.000 The company paid an installment of $2.500 for the frit expense? (Do nat round any Ghapher 11 Quir calculations, and round your final answer to the rnearest doar) month. What portion of the fost money $1,610 O c. $15.917 O D. 532,737 6. If bonds with a face value of $208.000 are isaued at 97, the amount of cash A. $201,780 O B. $195,520 O C. $208,000 OD. $207,903 7. On November 1, 2017, Archangel Services issued $302,000 of bonds with a stated rate of 10% at par. Interest payments occur each Apd 30 and Oake 31. On December 31, 2017, Archangel made an adjusting entry to accrue interest at year-end. What is the amount of Interest Expense that will be recorded on December 31, 2017? (Do not round any intermediate c and round your final answer to the nearest dolar.) A. $5,033 O B. $30,200 O c. $629 D. $15. 8. The balance in the Bonds Payable account is a credit of $71,000. The balance in the Discount on Bonds Payable account is a debit of $4,100. What is the bos carrying amount? OA. $75,100 O B. $4,100 C. $66,900 O D. $71,000Explanation / Answer
As i can see that 6 is correct and u need help with 5 and 7 part and 8th part is also wrong.
5.
Interest amount in 1st installment = (Note value * rate) / 12 months
= (161,000*12%) / 12
Interest amount in 1st installment = $1610
6.
Cash proceeds = 208,000*97%
= $201,760
7.
It is mentioned that the interest is paid on every April and October of the year, so this year Interest till Oct. must be already recorded and paid.
Now we only have to accrue interest for 2 Months(i.e. November and December)
Interest = 302,000 * 10% * 2/12 months
Interest = 5033
Interest expense(Dr.) 5033
Interest payable(Cr.) 5033
8. $75,100
Bond carrying amount = Bonds account balance+ Discount
= 71,000 + 4,100
Bond carrying amount = $75,100
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