Homework answers / question archive / 1

1

Accounting

Share With

1.McWherter Instruments sold $480 million of 10% bonds, dated January 1, on January 1, 2021. The bonds mature on December 31, 2040 (20 years). For bonds of similar risk and maturity, the market yield was 12%. Interest is paid semiannually on June 30 and December 31. Blanton Technologies, Inc., purchased $480,000 of the bonds as a long-term investment. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds issued on January 1, 2021. 2. Prepare the journal entries to record (a) their issuance by McWherter and (b) Blanton's investment on January 1, 2021. 3. Prepare the journal entries by (a) McWherter and (b) Blanton to record interest on June 30, 2021 (at the effective rate) 4. Prepare the journal entries by (a) McWherter and (b) Blanton to record interest on December 31, 2021 (at the effective rate).
Complete this question by Required 1 Required 2 Required 3 Required 4 Prepare the journal entries to record (a) their issuance by McWherter and (b) Blanton's investment on January 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) Debit Credit No 1 Date General Journal January 01, 2021 Cash Discount on bonds payable Bonds payable 407,777,760 72,222,240 480,000,000 2 480,000 January 01, 2021 Investment in bonds Discount on bonds payable Cash O® 72,222 407.778
points Complete this question by entering your answers in the tabs below. Required 1 Required 2 RegHired 3 Required 4 Prepare the journal entries by (a) McWherter and (b) Blanton to record interest on June 30, 2021 (at the effective rate). (If entry is required for a transaction/event, select "No journal entry required in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) No General Journal Credit Date June 30, 2021 Debit 24,466,666 1 Interest expense Discount on bonds payable Interest payable 466,666 24,000,000 2 June 30, 2021 24,000 Cash Discount on bonds payable Interest revenue O® 467 23,533
Required 1 Required 2 Required 3 Retuired 4 Prepare the journal entries by (a) McWherter and (b) Blanton to record interest on December 31, 2021 (at the effective ra (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) Debit Credit No 1 Date General Journal December 31, 202 Interest expense Discount on bonds payable Interest payable 24,494,666 494,666 24,000,000 2 24,000 December 31, 201 Cash Discount on bonds payable Interest revenue O® 495 x 23,505.

2.Christine opens a retail store. Her sales during the first year are $500,000, of which $120,000 has not been collected at year-end. Her purchases are $200,000. She still owes $30,000 to her suppliers, and at year-end she has $35,000 of inventory on hand. She incurred operating expenses of $170,000. At year-end she has not paid $40,000 of the expenses. Read the requirements Requirements a. and b. Compute her net income from the business assuming she elects the accrual method. Then compute her net income from the business assuming she elects the cash method. a. Requirements - X Accrual method Sales Cost of goods sold Gross profit Operating expenses a. Compute her net income from the business assuming she elects the accrual method. b. Compute her net income from the business assuming she elects the cash method. c. Would paying the $40,000 she owes for operating expenses before year-end change her net income under accrual method of reporting? under the cash method? 

3.Required information [The following information applies to the questions displayed below.) A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 420 units. Ending inventory at January 31 totals 170 units. Beginning inventory on January 1 Purchase on January 9 Purchase on January 25 Units 380 90 120 Unit Cost $ 3.70 3.90 4.00 Assume the periodic inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the weighted average method. (Round per unit costs to 3 decimal places. Amounts to be deducted should be indicated with a minus sign.)