Part -1:
ISSUING BONDS
On January 1, 2013, $800,000, 5-year, bonds with a contract rate of 8% payable annually were issued for cash of $684,627 when the market rate of interest was 12%. Were these bonds issued at a discount or at a premium? Why?
Prepare the journal entry to record the issuance (sale) of the bonds:
Complete the following interest schedule (assuming straight-line amortization):
Prepare the journal entry to record the first payment of interest on 12/31/2013:
Complete the following interest schedule (assuming effective-interest amortization):
Part -2:
ISSUING BONDS
On January 1, 2013, $1,200,000, 5-year, bonds with a stated rate of 10% payable annually were issued for cash of $1,295,844 when the market rate of interest was 8%. Were these bonds issued at a discount or at a premium? Why?
Prepare the journal entry to record the issuance (sale) of the bonds:
Complete the following interest schedule (assuming straight-line amortization):
Prepare the journal entry to record the first payment of interest on 12/31/2013:
Complete the following interest schedule (assuming effective-interest amortization):
Part -3:
STOCK TRANSACTIONS
Prepare the journal entries required to record the following transactions and then post them to the related T-accounts:
Strait Corp. sold 10,000 shares of $1 par value stock for $25 per share on May 1, 2014.
Post JE to the T-accounts below:
On December 1, 2014, Strait Corp. repurchased 1,000 shares of its stock on the market when it was trading for $16 per share.
On December 15, 2014, Strait Corp. sold 500 of the treasury shares for $30 each.
Part -4:
CASH DIVIDENDS
Jones Corp. has 200,000 shares of stock authorized, 120,000 shares issued, and 100,000 shares outstanding. On August 1, 2014, Jones' Board of Directors declared a cash dividend of $0.50 per share, with a date of record of September 1, 2014. The dividend will be paid on October 1, 2014.
Prepare the journal entries required to record the transactions described above, as needed, and then post them to the related T-accounts:
Part -5:
STOCK DIVIDENDS AND STOCK SPLITS
Jennings Corp. has 1,000,000 shares of $1 par value stock authorized, 200,000 shares issued, and 150,000 shares outstanding. On June 1, 2014, Jennings' Board of Directors declared a 10% stock dividend at a time that the stock carried a market value of $30.
Prepare the journal entry required to record the transaction described above and then post it to the related T-accounts:
Compute the number of shares outstanding after the June 1, 2014 stock dividend.
Jennings Corp. announced a 100% stock dividend on June 1, 2015.
Prepare the journal entry required to record the transaction described above and then post it to the related T-accounts:
Compute the number of shares outstanding after the June 1, 2015 stock dividend.