8 value: 1.00 points M10-9 Computing and Reporting a Bond Liability Issued at a

Question

8 value: 1.00 points M10-9 Computing and Reporting a Bond Liability Issued at a Discount [LO 10 ?? E-Tech Initiatives Limited plans to issue $450,000, 10-year, 5 percent bonds. Interest is payable annually on December 31. All of the bonds will be issued on January 1, 2016. Show how the bonds would be reported on the January 2, 2016, balance sheet if they are issued at 96. (Negative amounts should be indicated by a minus sign.) Answer is complete but not entirely correct. E-TECH INITIATIVES LIMITED Balance Sheet (partial) As of January 2, 2016 Long-Term Liabilities Bonds Payable Discount on Bonds Payable S 0,000 15,000 Carrying Value 465,000

Explanation / Answer

8) Balance sheet (partial)

9) Balance sheet (partial)

Long term liabilities Bonds payable 450000 Discount on bonds payable -18000 Carrying value 432000

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