7.Sonics Corporation issued $120,000 of 10-year, 9% bonds on January 1, 2007. The bonds pay interest annually and sold at 93.86% to yield 10%.
a.How much interest expense should Sonics recognize on the bonds for the year ended December 31, 2009?
b.What amount of net liability should Sonics report for the bonds on its December 31, 2010 balance sheet?
c.What is the firm’s amount for amortization of principal in 2008?
8.Cuneiform, Inc. reported the following items on its December 31, 2007 balance sheet:
Accounts payable$ 24,600
Capitalized lease obligations (5% due in 2008)86,000
Wages payable11,000
Machinery and equipment100,000
Bonds payable (due June 2008)42,000
Note payable (due April 2010)17,200
Treasury stock16,800
Required:
a.Prepare a schedule listing the current liabilities, the amounts, and total.
b.Prepare a schedule listing the long-term liabilities, the amounts, and total.