When bonds are sold for more than the face amount, this means that the:
A company issued $300,000, 6%, nine year bonds on January 1. The market rate of interest was 5%. Interest on these bonds is payable annually on December 31.
Note: I used four decimals for my PV factors. If you used three, you'll get a slightly different answer (something like 321,444).
Ask what your professor expects you to use, before the test.
A company estimates the cost of products warranties to be 3% of sales. The beginning balance in Estimated Warranty Liability account is $15,000. Sales for the period was $795,000. During the period, $32,600 was actually paid for warranty related costs. What is the ending balance in the Warranty Liability account?
A company provides a warranty on its products that it sells to customers. The warranty liability account had $1,200 balance on April 1. The company had sales of $67,000 in April and estimated warranty repairs at 3% of sales. During the month, the company actually paid out $2,400 for warranty repairs.
Determine the April 30 balance in the estimated warranty liability account.
If Elonu Corporation issued $1,000,000 of 10-year, 9% bonds payable on January 1 at 95, market interest rates were
A Corporation issued $450,000 face value, 4% 10-year bonds on January 1, Year 1 for $383,063. This price resulted in an effective interest rate of 6% on the bonds. Interest is payable semi-annually on June 30 and December 31.
| Journal Entry 1 | |||||
|---|---|---|---|---|---|
| Interest Expense | 11,492 | ||||
| Discount | 2,492 | ||||
| Cash | 9,000 | ||||
On January 1, a company retired $800,000 face value bonds at a call price of 103. The bonds were originally issued for $848,000. On the retirement date the bonds had an unamortized premium of $28,352. The entry to retire the debt would include a