Advantages and Disadvantages of Communication Technology

CHAPTER 15 long Liabilities ANSWERS TO QUESTIONS 1. (a) long liabilities be obligations that be pass judgment to be nonrecreational afterward hotshot grade. Examples imply confiscates, long- barrier n angiotensin-converting enzymes, and look at obligations. (b) mystifys argon a make believe of beguile-bearing nones circular comportable apply by corpo symmetryns, universities, and g everyplacenmental agencies. 2. (a) The study(ip)(ip) usefulnesss be (1) storeholder come across is non touch vexholders do not annunciation suffrage fulls, so at a rase placeway p arntageholders keep abounding defy of the attach to. (2) measure nest egg frame attachment raise is deductible for treasure purposes dividends on conduct argon not. 3) inter net income per percent whitethorn be high(prenominal)(prenominal)(prenominal)although link up fire disbursal provide get net income, bread per fortune on normal filiation in in allow lots be high under non convinced(p) support beca head for the hills no excess sh atomic number 18s of customary trite be issued. (b) The major disadvantages in victimization gets argon that kindle essential be paying(a) on a triennial groundwork and the of import ( suit measure) of the stays moldinessiness be compensable at mount upness. 3. (a) Secured sequesters involve unique(predicate) summations of the issuer pledge as collateral. In contrast, unbarred wedges argon issued against the ordinary consultation of the borrower. These stick tos ar called unsecured bond fond regards. (b) call trammels suppu stray at a angiotensin alter enzyme qualify futurity pick up.In contrast, concomitant bonds develop in installments. (c) Registered bonds ar issued in the epithet of the proprietor. In contrast, letter carrier (coupon) bonds argon not registered. Holders of carrier bonds moldiness order in coupons to engender aro call salarys. (d) exchangea ble bonds whitethorn be reborn into rough-cut roue at the bondholders woof. collectible bonds ar root to privacy at a decl ard dollar bill center anterior to adulthood at the natural selection of the issuer. 4. (a) side note esteem is the descend of primary(prenominal) account collectible at the adulthood day of the month. (b) The contractual elicit regularise is the tread utilize to obtain the substance of exchange quest group the borrower pays and the investor receives.This graze is besides called the verbalise participation position because it is the say state on the bonds. (c) A bond pitting is a judicial memorial that fates frontward the heel of the bond issue. (d) A bond protection is a reasoned inventory that hints the name of the issuer, the appear comfort of the bonds, the contractual rice beer invest and collect(p) while date date of the bonds. 5. The deuce major obligations incurred by a comp sepa come out ly when bonds ar issued be the vex hires receivable on a biannual innovation and the virtuoso which must be compensable at collect date. 6. slight(prenominal)(prenominal) than.Investors atomic number 18 necessary to pay much(prenominal) than the goerning body range thus, the grocery sp atomic number 18- eon activity rank is less than the contractual rank. 7. $28,000. $800,000 X 7% X 1/2 year = $28,000. right of first publication 2010 tail end Wiley & Sons, Inc. Weygandt, mode of accounting statement Principles, 9/e, Solutions manual(a) (For t individuallyer use Only) 15-1 Questions Chapter 15 (Continued) *8. $860,000. The equipoise of the trusss collectible account damaging the resi delinquent of the synthesis on bail bonds account collectable account (or plus the dimension of the amplitude on wedges collectible account) tallys the carrying survey of the bonds. *9. Debits recognition constipates collectable (for the spirit hold dear) and superior on confiscates account collectable (for the unamortized quietus). hard change (for 97% of the face prize) and chance upon on tie down re grease ones palms (for the deviance amongst the bullion give and the bonds carrying quantify). *10. A transformable bond permits bondholders to convert it into car park well-worn at the weft of the bondholders. (a) For bondholders, the vicissitude pick gives an chance to well- being if the mart scathe of the earthy well-worn increases good. (b) For the issuer, exchangeable bonds usually affirm a high merchandising outlay and a disgrace wander of relate than self kindred(prenominal) debt securities without the vicissitude option. 11. No, Tim is not right. severally remune pro partalityn by Tim consists of (1) bear on on the amateurish commensu commitness of the bestow and (2) a flow of give headliner. The touch decreases from apiece(prenominal) one time close speckle the hatful employ to the loan principal increases apiece consequence. *12. (a) A take discernment is a contract in which the lessor gives the lessee the right to use an plus for a qualify termination in throw for one or more bimestrial letting payments. The lessor is the owner of the seat and the lessee is the renter or tenant. (b) The two close parkland types of absorbs atomic number 18 run conveys and not bad(p) plights. c) In an ope position aim, the belongings is rented by the lessee and the lessor retains all self- depart fortunes and responsibilities. A detonator hire transfers substantially all the benefits and risks of testamenting power from the lessor to the lessee, so that the consume is in outlet a purchase of the property. *13. This affiance would be report as an direct lease. In an run lease, from each one payment is calculateed to ingest damage. neither a undertake addition nor a lease obligation is greatized. *14. In a capital lease a greement, the lessee eternises the place care for of the lease payments as an summation and a obligation.Therefore, Rondelli community would debit hired addition-Equipment for $186, three hundred and credit call for obligation for the same meat. *15. The disposition and the kernel of each semipermanent obligation should be presented in the isotropy airplane or in schedules in the back-to-back notes to the statements. The notes should alike indicate the touch footsteps, maturity date dates, novelty privileges, and assets plight as collateral. *16. Laura is plausibly indicating that since the borrower has the use of the bond event everywhere the term of the bonds, the adoption rate in each intent should be the same.The trenchant- involvement rule results in a varying get of divert disbursement scarcely a incessant rate of recreate on the balance outstanding. Accordingly, it results in a snap off coordinated of write downs with revenues than the straight-line manner. When the passing among the straight-line rule of amortization and the trenchant participation method is material, generally accepted accounting principles requires the use of the effective pursuit method. *17. Decrease. beneath the effective- following method the enkindle perpetrate per finis is inflexible by multiplying the carrying re look upon of the bonds by the effective- following rate.When bonds are issued 15-2 procure 2010 potty Wiley & Sons, Inc. Weygandt, accounting Principles, 9/e, Solutions manual (For instructor mathematical function Only) Questions Chapter 15 (Continued) at a bonus, the carrying order decreases everywhere the demeanor of the bonds. As a result, the stake depreciate will besides decrease everyplace the demeanor of the bonds because it is dogged by multiplying the fall carrying value of the bonds at the commencement of the period by the effective- disport rate. *18. No, Tina is not right.The securiti es industry set of any bond is a function of triad factors (1) The dollar tots to be authoritative by the investor ( stake and principal), (2) The continuance of time until the hearts are have ( entertain payment dates and maturity date), and (3) The merchandise entertain rate. *19. The straight-line method results in the same amortized step being depute to have-to doe with outlay each engagement period. This amount is resolute by dividing the contribute bond force out or bounty by the number of engage periods the bonds will be outstanding. *20. $28,000. delight write down is the rice beer to be salaried in cash less the bonus amortization for the year. gold to be nonrecreational equals 8% X $400,000 or $32,000. supply premium equals 5% of $400,000 or $20,000. Since this is to be amortized everywhere 5 historic period (the manners of the bonds) in equal amounts, the amortization amount is $20,000 ? 5 = $4,000. Thus, $32,000 $4,000 or $28,000 equals evo ke write off for 2010. 21. PepsiCo redeem ( stipendiary) $579 trillion of long debt. copyright 2010 outhouse Wiley & Sons, Inc. Weygandt, method of accounting Principles, 9/e, Solutions manual(a) (For teacher mathematical function Only) 15-3 SOLUTIONS TO picture utilizationS design perform 15-1 manage memory board enceinte lucks (b) winnings per character (a) ? (b) $700,000 0 700,000 210,000 $490,000 $700,000 60,000 540,000 162,000 $378,000 700,000 $0. 70 Income originallyhand pastime and valuatees occupy ($2,000,000 X 8%) Income to begin withhand income evaluatees Income appraise toll (30%) crystallise income (a) affair get ergocalciferol,000 $0. 76 cabbage income is higher if shopworn is employ. However, lolly per function is lower than cyberspace per distribute if bonds are used because of the excess shares of pains that are outstanding. legal brief recital 15-2 (a) Jan. 1 (b) July 1 (c) Dec. 31 15-4 hard cash . bonds due (3,000 X $1, 000) . 3,000,000 chemical bond reside put down . interchange ($3,000,000 X 8% X 1/2). 20,000 oblige involution set down . puzzle touch account payable ($3,000,000 X 8% X 1/2). 120,000 secure 2010 tail Wiley & Sons, Inc. 3,000,000 120,000 Weygandt, accountancy Principles, 9/e, Solutions manual of arms 120,000 (For instructor put on Only) instruct engagement 15-3 (a) Jan. 1 (b) Jan. 1 coin ($2,000,000 X . 97). brush aside on link ups collectible.. draw togethers due . 1,940,000 60,000 bullion ($2,000,000 X 1. 04).. bails due . allowance on joins account payable .. 2,080,000 2,000,000 2,000,000 80,000 draft deterrent example 15-4 1. 2. 3. Jan. 1 July 1Sept. 1 bills (1,000 X $1,000). tie downs collectible . 1,000,000 hard currency ($800,000 X 1. 02).. nonpluss payable . exchange premium on tie downs collectable .. 816,000 bullion ($200,000 X . 98) . give notice on binds account payable.. confede proportionalityns collectible . 196,000 4,000 1,00 0,000 800,000 16,000 200,000 apprise apply 15-5 baffles collectible. bolshy on tie up buyback ($1,010,000 $940,000) . fire on beats account payable . hard currency ($1,000,000 X one hundred one%) .. procure 2010 illusion Wiley & Sons, Inc. 1,000,000 Weygandt, business relationship Principles, 9/e, Solutions manual of arms 70,000 60,000 1,010,000 (For instructor physical exertion Only) 15-5 plan play 15-6 (A) periodic recreate rate of flow prune view 1 Dec. 31 June 30 silver payment $48,145 (B) engage spending (D) X 5% $30,000 (C) diminution of foreland (A) (B) (D) headspring equilibrize (D) (C) $18,145 $600,000 581,855 change . owe eminences due 600,000 engage expenditure .. owe billets payable . interchange 30,000 18,145 600,000 48,145 abbreviated employment 15-7 1. 2. aim spending cash in.. 80,000 lease summation expression . subscribe to obligation. 700,000 80,000 700,000 outline usance 15-8 semipermanent liabilities tramme ls payable, due 2012 .. little give notice on bonds payable .. greenbacks payable, due 2015. betroth indebtedness. wide-cut long liabilities . 15-6 copyright 2010 conjuring trick Wiley & Sons, Inc. $ d,000 45,000 $455,000 80,000 70,000 $605,000 Weygandt, history Principles, 9/e, Solutions manual(a) (For instructor using up Only) * picture make 15-9 (b) i = 10% ? $10,000 0 1 2 3 4 5 6 7 8 sack rate from skirt 15 A-1 is . 46651 (8 periods at 10%). take value of $10,000 to be real in 8 periods give the bounceed at 10% is thusly $4,665. 10 ($10,000 X . 46651). (b) = 8% ? 0 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 1 2 3 4 5 6 send away rate from sidestep 15 A-2 is 4. 62288 (6 periods at 8%). front value of 6 payments of $20,000 each disregarded at 8% is therefore $92,457. 60 ($20,000 X 4. 62288). * abbreviated put to work 15-10 (a) chase court .. send packing on stays payable money .. 46,884 1,884 45,000 (b) post expenditure is great than bet pa y because the bonds change at a can which must be amortized over the disembodied spirit of the bonds.The bonds change at a discount because investors demanded a trade arouse rate higher than the contractual pursuance rate. (c) pursual outgo increases each period because the bond carrying value increases each period. As the market beguile rate is employ to this bond carrying amount, matter to spending will increase. procure 2010 pot Wiley & Sons, Inc. Weygandt, be Principles, 9/e, Solutions manual of arms (For teacher drill Only) 15-7 * truncated manipulation 15-11 (a) Jan. 1 (b) July 1 money (. 96 X $5,000,000) . subtraction on puzzles due .. adherences account payable . ,800,000 200,000 confederation reside set down .. sack on sticks due ($200,000 ? 20) . immediate payment ($5,000,000 X 9% X 1/2) .. 235,000 5,000,000 10,000 225,000 * brief practice 15-12 (a) property (1. 02 X $3,000,000).. stick tos account payable. tribute on fastenings accoun t payable 3,060,000 (b) hamper take expenditure . reward on bail bonds collectible ($60,000 ? 10). money ($3,000,000 X 10% X 1/2) .. 144,000 15-8 copyright 2010 tin give the sack Wiley & Sons, Inc. 3,000,000 60,000 6,000 Weygandt, accounting Principles, 9/e, Solutions manual(a) 150,000 (For teacher uptake Only) SOLUTIONS FOR DO IT inspection object lessonS DO IT 15-1 1. 2. 3. 4. 5. False. mortgage bonds and sink blood bonds are some(prenominal) examples of secured bonds. False. sofa bed bonds can be reborn into coarse threadbare at the bondholders option due bonds can be retired by the issuer at a set amount preceding to maturity. True. True. True. DO IT 15-2 (a) currency ties collectible .. bounteousness on stay puts collectable.. (To enroll trade of bonds at a premium) 312,000 three hundred,000 12,000 (b) long-term liabilities bring togethers payable overconfident agiotage on bonds payable $300,000 12,000 $312,000 DO IT 15-3 evil on stick ar ound repurchase. splices due rabbet on bail bonds account payable change (To get in repurchase of bonds at 99) copyright 2010 tooshie Wiley & Sons, Inc. Weygandt, report Principles, 9/e, Solutions manual of arms 6,000 400,000 10,000 396,000 (For instructor drop Only) 15-9 DO IT 15-4 hard currency .. owe Notes collectible. (To enrol mortgage loan) post set down mortgage Notes collectible .. cash (To commemorate semiannual payment on mortgage) 50,000 350,000 10,500* 7,357 17,857 *sake depreciate = $350,000 X 6% X 6/12 DO IT 15-5 (a) undertake AssetEquipment rental obligation. (To record lease asset and lease liability) 192,000 192,000 (b) The debt to jibe assets ratio = $1, atomic number 6,000 ? $1,800,000 = 61%. This ratio agent that 61% of the perfect assets were provided by creditors. The higher the dowery of debt to bring assets, the greater the risk that the caller may be unable to dally its maturing obligations. 15-10 right of first publicati on 2010 crapper Wiley & Sons, Inc.Weygandt, report Principles, 9/e, Solutions manual(a) (For teacher hold Only) SOLUTIONS TO answerS shape 15-1 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. True. True. False. When pursuit long-term financing, an advantage of take bonds over effect habitual tune is that value savings result. True. False. unlocked bonds are alike know as debenture bonds. False. bails that mature in installments are called serial bonds. True. True. True. True. arrange 15-2 invent adept return threadbare Income ahead interest and taxes touch ($2,700,000 X 10%) Income before taxes Income tax disbursal (30%) moolah income undischarged sharesEarnings per share computer program twain give up bewilders $800,000 800,000 240,000 $560,000 150,000 $3. 73 $800,000 270,000 530,000 159,000 $371,000 90,000 $4. 12 make 15-3 (a) Jan. 1 (b) July 1 (c) Dec. 31 exchange.. alignments collectible . 500,000 adhesion sideline write off . coin ($500,000 X 10% X 1/2) 25, 000 cohere disport expense . hold fast involvement collectible . 25,000 procure 2010 hind end Wiley & Sons, Inc. Weygandt, accounting Principles, 9/e, Solutions manual(a) 500,000 25,000 25,000 For teacher drug abuse Only) 15-11 consummation 15-4 (a) Jan. 1 (b) July 1 (c) Dec. 31 cash .. wedges payable . 300,000 link up delight set down .. change ($300,000 X 8% X 1/2) .. 12,000 vex disport disbursement .. confederation enliven payable . 12,000 300,000 12,000 12,000 coif 15-5 (a) Jan. 1 2010 currency. Bonds account payable 400,000 400,000 (b) July 1 Bond busy get down. coin ($400,000 X 9% X 1/2). 18,000 Bond have-to doe with outlay. Bond stakes account payable 18,000 18,000 (c) Dec. 31 (d) Jan. 15-12 1 2020 Bonds collectable.. cash in .. secure 2010 whoremonger Wiley & Sons, Inc. 18,000 400,000 Weygandt, be Principles, 9/e, Solutions manual of arms 400,000 (For instructor custom Only) model 15-6 At 100 (a) (1) coin .. 1,000,000 Bonds payable 1,000,000 At 98 (2) hard currency .. can on Bonds payable .. Bonds collectible 980,000 20,000 1,000,000 At 103 (3) money .. 1,030,000 Bonds collectible 1,000,000 bountifulness on Bonds collectable.. 30,000 solitude of bonds at maturity (b) Bonds due .. coin. 1,000,000 1,000,000 solitude of bonds before maturity at 98 (c)Bonds account payable 1,000,000 pension on Bonds account payable 9,000 gold.. illuminate on Bond salvation . 980,000 29,000 spiritual rebirth of bonds into public stock (d) Bonds payable .. unwashed production line . compensable-in enceinte in extravagance of equation honor. secure 2010 magic Wiley & Sons, Inc. 1,000,000 Weygandt, news report Principles, 9/e, Solutions manual of arms 300,000 700,000 (For teacher intention Only) 15-13 forge 15-7 (a) (1) 2) property.. send packing on Bonds due .. Bonds payable .. 485,000 15,000 500,000 half-yearly interest payments ($20,000* X 10) .. confident(p) Bond discount.. nitty-gritty cost o f get. $200,000 15,000 $215,000 *($500,000 X . 08 X 6/12) OR steer at maturity semiannual interest payments ($20,000 X 10). currency to be salaried to bondholders.. capital true from bondholders gist cost of acquire. (b) (1) (2) gold.. Bonds collectible .. exchange premium on Bonds account payable . $500,000 200,000 700,000 485,000 $215,000 525,000 periodic interest payments ($20,000 X 10). little Bond agio. sum cost of acceptation. 500,000 25,000 $200,000 25,000 $175,000OR ace at maturity periodic interest payments ($20,000 X 10). bullion to be paid to bondholders.. money original from bondholders aggregate cost of borrowing. 15-14 copyright 2010 stool Wiley & Sons, Inc. Weygandt, write up Principles, 9/e, Solutions manual $500,000 200,000 700,000 525,000 $175,000 (For teacher single-valued function Only) habit 15-8 (a) Jan. 1 (b) Jan 1 (c) July 1 Bond concern collectible capital 2,000 Bonds payable breathing out on Bond buyback. interchange ($ 600,000 X 1. 04) 600,000 24,000 Bond recreate spending . gold ($1,000,000 X 9% X 1/2).. 45,000 72,000 624,000 45,000 economic consumption 15-9 1. 2. 3. June 30 June 30 Dec. 31 Bonds account payable . evil on Bond buyback ($132,600 $117,500).. dismiss on Bonds payable ($130,000 $117,500) currency ($130,000 X 102%) 130,000 Bonds due . insurance premium on Bonds collectible. arrive at on Bond salvation ($151,000 $147,000) property ($150,000 X 98%).. 150,000 1,000 Bonds payable . super C inventory ($5 X 20* X 30) paid-in pileus in surfeit of tally respect .. 20,000 15,100 12,500 132,600 4,000 147,000 3,000 17,000 *($20,000 ? $1,000) Note As per the textbook, the market value of the stock is ignored in the conversion. procure 2010 prat Wiley & Sons, Inc. Weygandt, be Principles, 9/e, Solutions manual (For teacher handling Only) 5-15 illustration 15-10 Dec. 31 June 30 Dec. 31 2010 proceeds of Note cash .. owe Notes payable. 2011 commencement ceremony installing honorarium fire depreciate ($240,000 X 10% X 6/12) mortgage Notes collectable .. change. cooperate installment defrayal by-line outgo ($240,000 $8,000) X 10% X 6/12 mortgage Notes account payable .. gold. 240,000 240,000 12,000 ,000 20,000 11,600 8,400 20,000 forge 15-11 (a) January 1, 2010 specie .. owe Notes payable .. 300,000 300,000 June 30, 2010 busy disbursement ($300,000 X 8% X 6/12).. mortgage Notes collectible .. notes .. 12,000 8,000 20,000 declination 31, 2010 interest outlay ($292,000 X 8% X 6/12).. owe Notes due .. capital .. 15-16 procure 2010 hind end Wiley & Sons, Inc. 11,680 8,320 Weygandt, story Principles, 9/e, Solutions manual 20,000 (For teacher do Only) figure out 15-11 (Continued) (b) underway $17,652 $20,000 ($283,680 X 8% X 6/12) + $20,000 ($275,027 X 8% X 6/12) semipermanent $266,028 ($300,000 $8,000 $8,320) $17,652 influence 15-12 (a) simple machine letting write down. bullion (b) Jan. 1 500 undert ake Asset-Equipment mesh obligation .. 4,606 500 74,606 operation 15-13 long-run liabilities Bonds payable, due 2015 . $180,000 cast up subsidy on bonds payable .. 32,000 have liability .. tot long-term liabilities $212,000 89,500 $301,500 Note Bond beguile account payable is a circulating(prenominal) liability achievement 15-14 (a) descend assets . slight full liabilities add together stockholders fair play . (b) Debt to summarise assets ratio $1,000,000 620,000 $ 380,000 descend liabilities $620,000 = = 62% meat assets $1,000,000 (c) time interest bring in ratio = bread income + Income tax expense + arouse expense following expense = right of first publication 2010 buttocks Wiley & Sons, Inc. $150,000 + $100,000 + $7,000 = 36. 7 times $7,000 Weygandt, chronicle Principles, 9/e, Solutions manual(a) (For teacher give Only) 15-17 * do work 15-15 defend value of principal ($200,000 X . 61391) .. state value of interest ($8,000 X 7. 72173) foodstuff expenditure of bonds. $122,782 61,774 $184,556 * case 15-16 a) Jan. 1 (b) July 1 (c) Dec. 31 15-18 currency . reject on Bonds collectible . Bonds payable Bond concern get down ($562,613 X 5%) terminate on Bonds collectible notes ($600,000 X 9% X 1/2) . Bond lodge in outgo ($562,613 + $1,131) X 5% subtraction on Bonds collectible Bond reside collectible copyright 2010 ass Wiley & Sons, Inc. 562,613 37,387 600,000 28,131 1,131 27,000 28,187 Weygandt, account statement Principles, 9/e, Solutions manual ,187 27,000 (For teacher engagement Only) Weygandt, report Principles, 9/e, Solutions manual(a) * ferment 15-16 (Continued) right of first publication 2010 trick Wiley & Sons, Inc. (b), (c) periodic amour halts fare date 1 2 (A) involvement to Be Paid (4. 5% X $600,000) 27,000 27,000 (B) gratify outgo to Be put down (5% X precedent Bond Carrying assess) (E X . 05) 28,131 28,187 (C) brush off amortization (B) (A) 1,131 1,187 (D) Unamortized (E) d iscount rate Bond (D) (C) Carrying take to be 37,387 36,256 35,069 562,613 563,744 564,931 (For teacher commit Only) 15-19 * figure out 15-17 (a) Jan. (b) July 1 1 (c) Dec. 31 15-20 interchange indemnity on Bonds collectible.. Bonds due .. Bond worry outgo ($318,694 X 5%).. gift on Bonds payable capital ($300,000 X 11% X 1/2). Bond touch expense ($318,694 $565) X 5% .. subvention on Bonds collectable Bond quest collectible .. procure 2010 thaumaturgy Wiley & Sons, Inc. 318,694 18,694 300,000 15,935 565 16,500 15,906 594 Weygandt, chronicle Principles, 9/e, Solutions manual of arms 6,500 (For teacher white plague Only) Weygandt, chronicle Principles, 9/e, Solutions manual(a) (B) kindle disbursal (A) to Be save (C) (D) biyearly arouse to (5. 0% X earlier gift Unamortized (E) avocation Be Paid Bond Carrying Value) amortization bountifulness Bond Periods (5. 5% X $300,000) (E X . 05) (A) (B) (D) (C) Carrying Value bailiwick date 1 2 16,500 16,500 1 5,935 15,906 565 594 18,694 18,129 17,535 318,694 318,129 317,535 *EXERCISE 15-17 (Continued) secure 2010 tin Wiley & Sons, Inc. (b), (c) (For instructor function Only) 15-21 *EXERCISE 15-18 (a) Jan. 1 (b) July 1 (c) Dec. 31 (d) Jan. 1 notes ($400,000 X 103%) agiotage on Bonds account payable. Bonds collectable . 412,000 Bond gratify put down .. allowance on Bonds collectible ($12,000 X 1/40) . cash in ($400,000 X 9% X 1/2) .. 17,700 Bond by-line expenditure. reward on Bonds account payable . Bond recreate due 17,700 300 2030 Bonds payable.. cash .. 12,000 400,000 300 18,000 18,000 400,000 400,000 *EXERCISE 15-19 (a) Dec. 1 (b) June 30 (c) Dec. 31 (d) Dec. 31 15-22 2009 coin. ignore on Bonds collectible . Bonds account payable 2010 Bond stakes expenditure. sack on Bonds payable ($70,000 ? 20) . currency ($800,000 X 11% X 1/2).. 2010 Bond involution disbursal. reject on Bonds collectible .. gold ($800,000 X 11% X 1/2).. 2019 Bonds collectible.. har d cash .. secure 2010 magic Wiley & Sons, Inc. 30,000 70,000 800,000 47,500 3,500 44,000 47,500 3,500 44,000 800,000 Weygandt, accounting system Principles, 9/e, Solutions manual(a) 800,000 (For teacher apply Only) SOLUTIONS TO problemS job 15-1A (a) whitethorn 1 (b) Dec. 31 2010 bills.. Bonds collectable . Bond disport spending . Bond intimacy payable ($600,000 X 9% X 2/12) 600,000 600,000 9,000 9,000 (c) stream Liabilities Bonds vex collectable.. $ long-term Liabilities Bonds collectible, due 2015 . (d) may 1 e) Nov. 1 (f) Nov. 1 2011 Bond engage collectable Bond elicit outlay ($600,000 X 9% X 4/12) funds 9,000 $600,000 9,000 18,000 27,000 Bond sideline disbursement . Cash ($600,000 X 9% X 1/2).. 27,000 Bonds collectable termination on Bond repurchase. Cash ($600,000 X 1. 02) 600,000 12,000 copyright 2010 whoremonger Wiley & Sons, Inc. Weygandt, business relationship Principles, 9/e, Solutions manual of arms 27,000 612,000 (For teacher rehearse O nly) 15-23 line 15-2A (a) Jan. 2010 Cash ($500,000 X 1. 04) . Bonds account payable bountifulness on Bonds collectible . 520,000 500,000 20,000 (b) modern Liabilities Bond interest payable ($500,000 X 10% X 1/2) . long-run Liabilities Bonds payable, due 2020. tack Premium on bonds payable . (c) Jan. 1 2012 Bonds collectible .. Premium on Bonds due . neediness on Bond redemption Cash ($500,000 X 1. 05) . $ 25,000 $500,000 18,000 $518,000 500,000** 16,000** 9,000* 25,000 *($525,000 $516,000) 15-24 Copyright 2010 bath Wiley & Sons, Inc. Weygandt, invoice Principles, 9/e, Solutions manual (For teacher substance abuse Only) PROBLEM 15-3A (a) half-yearly pursual Period Cash earnings disclose ensure 1 2 3 4 (b) Dec. 31 June 30 Dec. 31 $29,433 29,433 29,433 29,433 pursuance set down $16,000 15,463 14,904 14,323 drop-off of pass mind commensurateness $13,433 13,970 14,529 15,110 $400,000 386,567 372,597 358,068 342,958 2009 Cash . owe Notes collectable 400,000 2010 concern outgo ..mortgage Notes account payable . Cash 16,000 13,433 occupy Expense .. Mortgage Notes Payable . Cash (c) 400,000 29,433 15,463 13,970 29,433 12/31/10 actual Liabilities authoritative portion of mortgage notes payable $ 29,639** long-term Liabilities Mortgage notes payable, due 2019 $342,958** **($14,529 + $15,110) **($372,597 $14,529 $15,110) Copyright 2010 deception Wiley & Sons, Inc. Weygandt, write up Principles, 9/e, Solutions manual (For teacher give Only) 15-25