Question 8 A $620000 bond was retired at 102 when the carrying value of the bond

Question

Question 8

A $620000 bond was retired at 102 when the carrying value of the bond was $637000. The entry to record the retirement would include a

loss on bond redemption of $12400

Question 9

Oriole Company reported net income of $102000 for the year ended December 31, 2016. During the year, inventories decreased by $15000, accounts payable decreased by $20500, depreciation expense was $18300 and a gain on disposal of equipment of $8800 was recorded. Net cash provided by operating activities in 2016 using the indirect method was

Question 10

Bonita’s Vegetable Market had the following transactions during 2016:

1. Issued $47000 of par value common stock for cash.
2. Repaid a 6 year note payable in the amount of $24000.
3. Acquired land by issuing common stock of par value $47000.
4. Declared and paid a cash dividend of $7200.
5. Sold a long-term investment (cost $3500) for cash of $5600.
6. Acquired an investment in IBM stock for cash of $9500.

What is the net cash provided by financing activities?

gain on bond redemption of $12400.

Explanation / Answer

8) Journal entry :

So answer is b) gain on bond redemption of $4600.

9) Net cash provided by operating activities in 2016 using the indirect method was

So answer is c) $15800

Date account and explanation debit credit Bonds payable 620000 Premium on bonds payable 17000 Cash (620000*1.02) 632400 Gain on redemption of bonds 4600

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