PROBLEM 1.Off-Shore Corporation reported the following items in its December 31, 2007, financial statements: Capital lease obligations (10% due in 2008$ 40,000 Treasury stock10,000 Preferred...

PROBLEM

1.Off-Shore Corporation reported the following items in its December 31, 2007, financial statements:

Capital lease obligations (10% due in 2008$ 40,000

Treasury stock10,000

Preferred stock150,000

Accounts payable4,500

Bonds payable (due 2012)450,000

Contingent liability (reasonably possible to require payment

in 2009)

20,000

Common stock125,000

Wages payable7,500

Required:

Prepare schedules of (a) current and (b) long-term liabilities.

2.Mooreland Corporation issued $500,000 of 10-year, 7% 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 6%.