34DRARSHelpSave & ExitBlair Madison Company issues $1.1 million of new stock and pays $201,000 in cash dividends during the year. In addition, thecompany took advantage of falling interest rates to borrow $1.51 million in a new bond issue and paid off existing bonds with aface value of $2.05 million. The company bought 501 of another company's $1,010 bonds at a $101,000 premium. The net cashflow provided by financing activities is:Multiple ChoiceAn outflow of $101,000.An outflow of $201,000.An inflow of $540,000.Su

To calculate the net cash flow provided by financing activities, we need to sum up all cash flows…

Answered: 34 DRARS Help Save & Exit Blair Madison…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 14MC: Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the...

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Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the market of interest was 9%. The company uses the effective-interest method of amortization. At the end of the year, the company will record ________. A. a credit to cash for $28,733 B. a debit to interest expense for $31,267 C. a debit to Discount on Bonds Payable for $1,267 D. a debit to Premium on Bonds Payable for $1.267
Berk Company engaged in the following investment transactions during the current year. April 1 July 1 Bought 40,000 of the 100,000 outstanding shares of Apex Company for $400,000. During the year, Apex Company reported net income of $30,000, and paid dividend of $10,000. Bought a $270 million bond with 8% interest rate. The market interest rate was 6% for bonds of similar risk and maturity. Berk paid $310 million for the bonds. The company will receive interest semiannually on June 30 and December 31. The fair value of the bonds at December 31 was $240 million. Dec 31 Required: 1. Beck has significance influence over Apex's management. On December 31, how much would Berk report as the value of its investment in Apex on the balance sheet? 2. Berk intends to actively trade the bond investment. a. Prepare the journal entries related to the bond on July 1 and on December 31. b. On December 31, how much would Berk report as the value of the bond on The balance sheet Please avoid…
A corporation sold an issue of 20-year bonds, having a total face value of P10,000,000 for P9,500,000. The bonds bear interest at 16%, payable semiannually. The company wishes to establish a sinking fund for retiring the bond 1. issue and will make semiannual deposits that will earn 12%, compounded semiannually. Compute the annual cost for interest and redemption of these bonds. 2. A company has issued 10-year bonds, with a face value of P1,000,000 in P1,000 units. Interest at 16% is paid quarterly. If an investor desires to earn 20% nominal interest on P100,0000 worth of these bonds, what would the selling price have to be? 3. A P1,500-bond which will mature in 10 years and with a bond rate of 15% payable annually is to be redeemed at
Blair Madison Company issues $2.5 million of new stock and pays $341,000 in cash dividends during the year. In addition, the company took advantage of falling interest rates to borrow $1.65 million in a new bond issue and paid off existing bonds with a face value of $2.75 million. The company bought 515 of another company's $1,150 bonds at a $115,000 premium. The net cash flow provided by financing activities is:
Ancore Company had no trading debt securities prior to this year. It had the following transactions this year involving trading debt securities. July 28 Purchased Target bonds for $30,000. Aug. 17 Purchased Kroger bonds for $105,000. 26 Purchased Ford bonds for $60,000. Sep. 5 Sold some of its Target bonds that had cost $6,000 for $6,300 cash. 8 Sold some of its Kroger bonds that had cost $45,000 for $46,200 cash. Oct. 12 Purchased Marshall bonds for $120,000. Nov. 28 Sold all of its Ford bonds for $54,000 cash. Required 1. Prepare journal entries to record these transactions. 2. Prepare a table to compare the year-end cost and fair values of Ancore’s trading debt securities. Yearend fair values: Target, $25,500; Kroger, $66,000; and Marshall, $117,000. 3. Prepare the adjusting entry to record the year-end fair value adjustment for the portfolio of trading debt securities.
2. In January 2018, the management of ABC Company concludes that it has sufficient cash to purchase some short-term investments in bonds and shares. During the year, the following transactions occurred. Feb. 1 Purchased 500 shares of DET shares for 45,000TL. Mar. 1 Purchased 600 shares of STL shares for 30,000TL. Mar.25 DET declared 0.90TL dividends per share payable on September 1. June 1 Purchased 40 1,000TL 9% CTN bonds for 60,000TL. Interest is payable semiannually on June 1 and November 1. July 1 Sold 200 shares of DET and collected totally 19,880TL. Aug. 1 Received a 1.5TL per share cash dividend on the STL shares. Sept. 1 Received cash dividend on DET shares. Oct. 1 Sold 20 CTN bonds and collected totally 25,750TL. Nov. 1 Received the semiannual interest on CTN bonds. Required: Journalize and post the transactions.
How would I Debit and Credit for the transactions shown? Oct. 1 Purchased $90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of $375. The bonds are classified as a held-to-maturity long-term investment. 7 Sold, at $38 per share, 2,600 shares of treasury common stock purchased on Jun. 8. 14 Received a dividend of $0.60 per share from the Solstice Corp. investment on Jun. 1. 29 Sold 1,000 shares of Solstice Corp. at $45, including commission. 31 Recorded the payment of semiannual interest on the bonds issued on May 1 and the amortization of the premium for six months. The amortization is determined using the straight-line method. Dec. 31 Accrued interest for three months on the Dream Inc. bonds purchased on Oct. 1. 31 Pinkberry Co. recorded total earnings of $240,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. 31 The fair value for Solstice…
CNE financed this new equipment purchase through a combination of debt and equity. On January 1st, CNE received a $800, 000 loan from a commercial bank at 5% interest. Starting on February 1 st principal and interest payments of 11, 700 are to be paid on a monthly basis over 7 years. Also, in January CNE issued $750, 000 of common stock. In this offering, 100, 000 shares were issued at a par value of $3 per share. Using an amortization schedule, in the month of April, what will be CNE Inc. interest payment on its $800, 000 loan? In the month of April what is the remaining dollar amount balance on CNE Inc.'s loan?
As equal instalment payments are made on a long-term loan, both the interest portion and the principal portion decrease O the interest and principal portions remain the same. O the interest portion increases and the principal portion decreases. O the interest portion decreases and the principal portion increases. QUESTION 20 For last year, Bonita Corporation reported net income of $710,000, and paid $174,000 in dividends for the 250,000 preferred shares issued. The weighted average of common shares was 1,675,000 shares. Bonita's basic earnings per share was $0.42 $0.28 O $0.32 O $0.10
Hermosa Vista Company issued $180,000 5-year, 6.00% bonds and received $183,843 in cash. The market rate of interest when the bonds were issued was 5.50%. What is the amount of interest expense to be recorded for the first annual interest period if the company uses simplified effective-interest amortization? Multiple Choice $9,900.00 $10,111.37 $10,800.00 $11,030.58
On January 2, 2014, a calendar-year corporation sold 12% bonds with a face value of $200,000. These bonds mature in six years, and interest is paid semi-annually on June 30 and December 31. The bonds were yield 10%. What was the issue price of the bond? a. $217,726.50 b. $183,232.31 c. $200,000.00 d. $344,000.00 e. None of the above
Lifo Inc. raises $4 million dollars by issuing bonds with an interest rate of 10%. Assuming income tax rate of 30%, 100,000 common shares issued, and an increase in net income of $1,000,000 due to the additional resources, what is the effect on earnings per share? ) $40 increase b) $28 increase c) $4.20 increase d) $7 increase

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