Exam 14: Long-Term Liabilities

Dolby,Inc.issued a $5,000 face value,10%,five-year bond at 98.What will be the journal entries at the maturity of the bond? The bonds have semiannual interest,and the company uses the straight-line method of discount amortization.

When computing the present value of a bond,which interest rate is used? Why?

When a bond is issued,the issue price is the present value of the interest payments the bondholder will receive while holding the bond plus the present value of the bond principal that will be received at maturity.

If bonds with a face value of $206,000 are issued at 106,the amount of cash proceeds is ________.

On January 1,2016,Belden,Inc.issued long-term notes payable for $50,000.The note will be paid over 10 years with payments of $5,000 plus 12% interest due each January 1,beginning January 1,2017.Prepare the amortization schedule for the first three payments.

On January 1,2016,Demarest Company purchased equipment and signed a six-year mortgage note for$160,000 at 15%.The note will be paid in equal annual installments of $42,278,beginning January 1,2017.Calculate the portion of principal amount paid on the third installment.(Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar. )

Premium on Bonds Payable is additional Interest Expense of the company that issues the bond.

The balance sheet shows the balance in Bonds Payable plus any discount or minus any premium.

Callable bonds are bonds that the issuer may call and pay off at a specified price whenever the issuer wants.

On June 1,2017,Smith & Beecham Services issued $32,000 of 8% bonds that mature in five years.They were issued at par.The bonds pay semiannual interest payments on June 30 and December 31 of each year.On December 31,2017,what is the total amount paid to bondholders?

The balance in the Bonds Payable account is a credit of $75,000.The balance in the Discount on Bonds Payable account is a debit of $2,900.What is the bond's carrying amount?

On January 1,2017,Door #2 Services issued $20,000 of 8% bonds that mature in five years.They were issued at par.The bonds pay semiannual interest payments on June 30 and December 31 of each year.Provide the journal entry for the payment made on June 30,2017.