Wise Company was started on January 1, 2013, when it issued 20 year, 10 percent, $200,000 face value bonds at a price of 90. Interest is payable annually at December 31 of each year. Wise immediately purchased land with the proceeds (cash received) from the bond issue. Wise leased the land for $27,000 cash per year. The lease revenue payments are due every December 31.
Required:
Set up the following horizontal statements model on a blank spreadsheet. The SCF Activity column is for the classifications operating, financing, or investing.
a. Enter the effects of the 2013 transactions. Assume that both the interest and lease payments occurred on December 31. Notice that the entry for the lease has already been entered as an example. Calculate the ending balances.
b. Enter the effects of the 2014 transactions. Assume that both the interest and lease payments occurred on December 31. Calculate the ending balances.
c. Enter the effects of the 2015 transactions. Assume that both the interest and lease payments occurred on December 31. Calculate the ending balances.
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d. On January 1, 2016, Wise Company sold the land for $190,000 cash. Immediately after the sale of the land, Wise repurchased its bond at a price of 93. Assume that no other accounting events occurred during 2016. Enter the effects of the 2016 transactions. Calculate the ending balances.