5.Adam and Eva Company reported the following items in its December 31, 2007, financial statements:
Capital lease obligations (10% due in 2008)$ 50,000
Treasury stock12,500
Preferred stock100,000
Accounts payable5,500
Bonds payable (due 2010)500,000
Contingent liability (reasonably possible to require payment in 2007)25,000
Common stock175,000
Wages payable6,500
Required:
Prepare schedules of (a) current and (b) long-term liabilities.
(a)
6.Weston Corporation issued $1,000,000 of 10-year, 9% bonds on January 1, 2007. The bonds pay interest semiannually. How much did the bonds sell for under each of the following situations?
a.The bonds sold to yield 8%.
b.The bonds sold to yield 10%