Chap014.xls
12
Student Name: Instructor Class: McGraw-Hill/Irwin Problem 14-03 Requirement 1: BRADLEY RECREATIONAL PRODUCTS Amortization Table at Effective Interest Rate Cash Effective Increase in Outstanding Pay- Interest Interest Balance Balance ment 4.5% 5% 96,768 1 4,500 4,838 338 97,106 2 4,500 4,855 355 97,461 3 4,500 4,873 373 97,834 4 4,500 4,892 392 98,226 5 4,500 4,911 411 98,637 6 4,500 4,932 432 99,069 7 4,500 4,953 453 99,522 8* 4,500 4,978 478 100,000 36,000 39,232 3,232 *rounded Correct! Correct! Correct! Requirement 2: BRADLEY RECREATIONAL PRODUCTS Amortization Table Straight-Line Method Cash Recorded Increase in Outstanding Pay- Payment Interest Balance Balance ment 4.5% 100,000 96,768 1 4,500 4,904 404 97,172 2 4,500 4,904 404 97,576 3 4,500 4,904 404 97,980 4 4,500 4,904 404 98,384 5 4,500 4,904 404 98,788 6 4,500 4,904 404 99,192 7 4,500 4,904 404 99,596 8 4,500 4,904 404 100,000 36,000 39,232 3,232 Correct! Correct! Correct! Requirement 3: BRADLEY RECREATIONAL PRODUCTS General Journal Account Debit Credit (effective interest) Interest expense 4,911 «- Correct! Discount on bonds payable 411 Cash 4,500 (straight-line) Interest expense 4,904 «- Correct! Discount on bonds payable 404 Cash 4,500
Transcript of Chap014.xls
Student Name: InstructorClass: McGraw-Hill/Irwin
Problem 14-03
Requirement 1:
BRADLEY RECREATIONAL PRODUCTSAmortization Table at Effective Interest Rate
Cash Effective Increase in OutstandingPay- Interest Interest Balance Balancement 4.5% 5%
96,768 1 4,500 4,838 338 97,106 2 4,500 4,855 355 97,461 3 4,500 4,873 373 97,834 4 4,500 4,892 392 98,226 5 4,500 4,911 411 98,637 6 4,500 4,932 432 99,069 7 4,500 4,953 453 99,522 8* 4,500 4,978 478 100,000
36,000 39,232 3,232 *rounded Correct! Correct! Correct!
Requirement 2:
BRADLEY RECREATIONAL PRODUCTSAmortization Table Straight-Line Method
Cash Recorded Increase in OutstandingPay- Payment Interest Balance Balancement 4.5%
100,000 96,768 1 4,500 4,904 404 97,172 2 4,500 4,904 404 97,576 3 4,500 4,904 404 97,980 4 4,500 4,904 404 98,384 5 4,500 4,904 404 98,788 6 4,500 4,904 404 99,192 7 4,500 4,904 404 99,596 8 4,500 4,904 404 100,000
36,000 39,232 3,232 Correct! Correct! Correct!
Requirement 3:
BRADLEY RECREATIONAL PRODUCTSGeneral Journal
Account Debit Credit(effective interest)Interest expense 4,911 «- Correct!
Discount on bonds payable 411 Cash 4,500 (straight-line)Interest expense 4,904 «- Correct!
Discount on bonds payable 404 Cash 4,500
E13
Enter appropriate data in yellow cells. Your totals will be verified.
C14
Hint: Use the =Round function with the formulas in this column, rounding to zero decimal places.
C21
HINT: Round this cell up to bring Outstanding Balance to $100,000.
D52
Enter appropriate data in yellow cells. Your entries will be verified.
Given Data P14-03:
BRADLEY RECREATIONAL PRODUCTS
Bond issue $ 100,000 Bond issue - term (years) 4 Bond issue - interest rate 9%Bond annual rate of return 10%Bonds issued at $ 96,768
Student Name: InstructorClass: McGraw-Hill/Irwin
Problem 14-05
Requirement 1:Cromley Motor Products
Interest $ 23,267,556 Principal 54,147,200 Present value (price) of the bonds $ 77,414,756 «- Correct!
Requirement 2:CROMLEY MOTOR PRODUCTS
Amortization Schedule
Cash EffectivePayment Interest Increase in Outstanding
4.5% 5% Balance Balance 77,414,756
1 3,600,000 3,870,738 270,738 77,685,494 2 3,600,000 3,884,275 284,275 77,969,769 3 3,600,000 3,898,488 298,488 78,268,257 4 3,600,000 3,913,413 313,413 78,581,670 5 3,600,000 3,929,084 329,084 78,910,754 6 3,600,000 3,945,538 345,538 79,256,292 7 3,600,000 3,962,815 362,815 79,619,107 8* 3,600,000 3,980,893 380,893 80,000,000
28,800,000 31,385,244 2,585,244 *rounded Correct! Correct! Correct!
BARNWELL INDUSTRIESAmortization Schedule
Cash EffectiveInterest Interest Increase in Outstanding
4.5% 5% Balance Balance 77,415
1 3,600 3,871 271 77,686 2 3,600 3,884 284 77,970 3 3,600 3,899 299 78,269 4 3,600 3,913 313 78,582 5 3,600 3,929 329 78,911 6 3,600 3,946 346 79,257 7 3,600 3,963 363 79,620 8* 3,600 3,980 380 80,000
28,800 31,385 2,585 *rounded Correct! Correct! Correct!
D10
Hint: Use the =Round function with this formula, rounding to zero decimal places.
E20
Enter appropriate data in yellow cells. Your totals will be verified.
C21
Hint: Use the =Round function with the formulas in this column, rounding to zero decimal places.
C28
HINT: Round this cell down to bring Outstanding Balance to $80,000,000.
E38
Enter appropriate data in yellow cells. Your totals will be verified. Round this number to the nearest dollar.
C39
Hint: Use the =Round function with the formulas in this column, rounding to zero decimal places.
C46
HINT: Round this cell down to bring Outstanding Balance to $80,000.
Student Name: InstructorClass: McGraw-Hill/Irwin
Problem 14-05
Requirement 3:General Journal
Account Debit CreditFebruary 1, 2011 (Cromley)Cash 77,414,756 Discount on bonds payable 2,585,244 Bonds payable 80,000,000 «- Correct!
February 1, 2011 (Barnwell)Bond investment 80,000 «- Correct!
Discount on bond investment 2,585 Cash 77,415
Requirement 4:General Journal
Account Debit CreditJuly 31, 2011 (Cromley)Interest expense 3,870,738 «- Correct!
Discount on bonds payable 270,738 Cash 3,600,000 July 31, 2011 (Barnwell)Cash 3,600 Discount on bond investment 271 Interest revenue 3,871 «- Correct!
December 31, 2011 (Cromley)Interest expense 3,236,896 «- Correct!
Discount on bonds payable 236,896 Interest payable 3,000,000 December 31, 2011 (Barnwell)Interest receivable 3,000 Discount bond on investment 237 Interest revenue 3,237 «- Correct!
January 31, 2012 (Cromley)Interest expense 647,379 Interest payable 3,000,000 Discount on bonds payable 47,379 Cash 3,600,000 «- Correct!
January 31, 2012 (Barnwell)Cash 3,600 Discount on bond investment 47 Interest receivable 3,000 Interest revenue 647 «- Correct!
D55
Enter appropriate data in yellow cells. Your entries will be verified.
D69
Enter appropriate data in yellow cells. Your entries will be verified.
Student Name: InstructorClass: McGraw-Hill/Irwin
Problem 14-05
July 31, 2012 (Cromley)Interest expense 3,898,488 «- Correct!
Discount on bonds payable 298,488 Cash 3,600,000 July 31, 2012 (Barnwell)Cash 3,600 Discount on bond investment 299 Interest revenue 3,899 «- Correct!
December 31, 2012 (Cromley)Interest expense 3,261,178 «- Correct!
Discount on bonds payable 261,178 Interest payable 3,000,000 December 31, 2012 (Barnwell)Interest receivable 3,000 Discount on bond investment 261 Interest revenue 3,261 «- Correct!
January 31, 2013 (Cromley)Interest expense 652,236 Interest payable 3,000,000 Discount on bonds payable 52,236 Cash 3,600,000 «- Correct!
January 31, 2013 (Barnwell)Cash 3,600 Discount on bond investment 52 Interest receivable 3,000 Interest revenue 652 «- Correct!
Given Data P14-05:
CROMLEY MOTOR PRODUCTS
Bond issue by Cromley Motor Products $ 80,000,000 Bond issue (years) 4 Bond issue interest rate 9%Bond annual yield 10%Long-term investment by Barnwell Industries $ 80,000
Student Name: InstructorClass: McGraw-Hill/Irwin
Problem 14-07
Requirement 1:McWHERTER INSTRUMENTS
Interest $ 274,545,440 Principal 56,820,000 Present value (price) of the bonds $ 331,365,440 «- Correct!
Requirement 2:General Journal
Account Debit CreditJanuary 1, 2009 (McWherter)Cash 331,365,440 Discount on bonds 68,634,560 Bonds payable 400,000,000 «- Correct!
January 1, 2009 (Blanton)Bond investment 400,000 «- Correct!
Discount on bond investment 68,635 Cash 331,365
Requirement 3:General Journal
Account Debit CreditJune 30, 2009 (McWherter)Interest expense 16,568,272 «- Correct!
Discount on bonds payable 568,272 Cash 16,000,000 June 30, 2009 (Blanton)Cash 16,000 Discount on bond investment 568 Interest revenue 16,568 «- Correct!
Requirement 4:General Journal
Account Debit CreditDecember 31, 2009 (McWherter)Interest expense 16,596,686 «- Correct!
Discount on bonds payable 596,686 Cash 16,000,000 December 31, 2009 (Blanton)Cash 16,000
D8
Enter appropriate data in yellow cells. Your total for Present Value will be verified.
D18
Enter appropriate data in yellow cells. Your entries will be verified.
D32
Enter appropriate data in yellow cells. Your entries will be verified.
Discount on bond investment 597 Interest revenue 16,597 «- Correct!
Given Data P14-07:
McWHERTER INSTRUMENTS
Bond issue by McWherter Instruments $ 400,000,000 Bond issue (years) 20 Bond issue interest rate 8%Bond annual yield 10%Long-term investment by Blanton Technologies $ 400,000
Student Name: InstructorClass: McGraw-Hill/Irwin
Problem 14-13
A&G WAREHOUSERSAmortization Schedule
Requirement 1 Present value (price) of note: Interest $ 15,849 Principal 68,301 Present value (price) of the note $ 84,150 «- Correct!
A&G WAREHOUSERSGeneral Journal
Account Debit CreditEquipment 84,150 Discount on notes payable 15,850 Notes payable 100,000 «- Correct!
Requirement 2:Amortization Schedule
EffectiveDec. Cash Interest Increase in Outstanding31 Payment 10% Balance Balance
84,150 2011 5,000 8,415 3,415 87,565 2012 5,000 8,757 3,757 91,322 2013 5,000 9,132 4,132 95,454 2014 5,000 9,546 4,546 100,000
20,000 35,850 15,850 *rounded Correct! Correct! Correct!
Requirement 3:
A&G WAREHOUSERSGeneral Journal
Account Debit CreditInterest expense 9,132 «- Correct!
Discount on notes payable 4,132 Cash 5,000
D9
Enter appropriate data in yellow cells. Your answer will be verified.
A17
Enter appropriate account in this column. Your entries will not be verified.
D17
Enter appropriate data in yellow cells. Your entries will be verified.
E27
Enter appropriate data in yellow cells. Your totals will be verified.
C28
The numbers in this column are rounded to the nearest dollar. The entry for 2012 is rounded to amortize the note to $100,000. Hint: Use the =Round function with the formulas in this column, rounding to zero decimal places.
A41
Enter appropriate account in this column. Your entries will not be verified.
D41
Enter appropriate data in yellow cells. Your entries will be verified.
Student Name: InstructorClass: McGraw-Hill/Irwin
Problem 14-13
Requirement 4:Loan Amount $ 84,150
Multiplier 3.16987 Installment Payment $ 26,547
Correct!
Requirement 5:Amortization Schedule
EffectiveDec. Cash Interest Increase in Outstanding31 Interest 10% Balance Balance
84,150 2009 26,547 8,415 18,132 66,018 2010 26,547 6,602 19,945 46,073 2011 26,547 4,607 21,940 24,133 2012 26,547 2,414 24,133 -
106,188 22,038 84,150 *rounded Correct! Correct! Correct!
Requirement 6:
A&G WAREHOUSERSGeneral Journal
Account Debit CreditInterest expense 4,607 Note payable 21,940 Cash 26,547 «- Correct!
C49
HINT: Use the =ROUND function and round this total to zero decimal places.
E57
Enter appropriate data in yellow cells. Your totals will be verified.
C58
The numbers in this column are rounded to the nearest dollar. The entry for 2012 is rounded to fully amortize the note. Hint: Use the =Round function with the formulas in this column, rounding to zero decimal places.
A71
Enter appropriate account in this column. Your entries will not be verified.
D71
Enter appropriate data in yellow cells. Your entries will be verified.
Given Data P14-13:
A&G WAREHOUSERS
Note issue $ 100,000 Term of note issue (years) 4 Note issue interest rate 5%Comparison interest rate 10%
