BE 247
On January 1, 2011, Zooland Enterprises sold 8%, 20-year bonds with a face amount of $1,000,000 for $960,000. Interest is payable semiannually on July 1 and January 1.
Instructions
Calculate the carrying value of the bond at December 31, 2011 and 2012.
BE 248
Delta Company issued bonds with a face amount of $1,500,000 in 2005. As of January 1, 2011, the balance in Discount on Bonds Payable is $4,800. At that time, Delta redeemed the bonds at 101.
Instructions
Assuming that no interest is payable, make the entry to record the redemption.
BE 249
Nicholson Inc. issues a $1,200,000, 10%, 10-year mortgage note on December 31, 2011, to obtain financing for a new building. The terms provide for semiannual installment payments of $96,291.
Instructions
Prepare the entry to record the mortgage loan on December 31, 2011, and the first installment payment.
BE 250
Franco Corporation reports the following selected financial statement information at December 31, 2011:
Total Assets$110,000
Total Liabilities65,000
Net Income18,000
Interest Income1,600
Interest Expense900
Tax Expense300
Instructions
Calculate the debt to total assets and times interest earned ratios.