12. On January 1, a company issues bonds dated January 1 with a par value of $74

Question

12. On January 1, a company issues bonds dated January 1 with a par value of $740,000. The bonds mature in 3 years. The contract rate is 10%, and interest is paid semiannually on June 30 and December 31. The bonds are sold for $719,000. The journal entry to record the first interest payment using straight-line amortization is:

16. On January 1, a company issues bonds dated January 1 with a par value of $330,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $343,395. The journal entry to record the issuance of the bond is:

20.

n preparing a company's statement of cash flows for the most recent year using the indirect method, the following information is available:

Net cash provided by operating activities was:

22. On January 1, Year 1, Stratton Company borrowed $210,000 on a 10-year, 10% installment note payable. The terms of the note require Stratton to pay 10 equal payments of $34,177 each December 31 for 10 years. The required general journal entry to record the payment on the note on December 31, Year 2 is

23. Fargo Company's outstanding stock consists of 950 shares of noncumulative 5% preferred stock with a $10 par value and 4,800 shares of common stock with a $1 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends.

24. Fetzer Company declared a $0.55 per share cash dividend. The company has 280,000 shares authorized, 266,000 shares issued, and 11,200 shares in treasury stock. The journal entry to record the payment of the dividend is:

25. Northington, Inc. is preparing the company's statement of cash flows for the fiscal year just ended. Using the following information, determine the amount of cash flows from financing activities:

Net income for the year was $ 58,000 Accounts payable decreased by 21,000 Accounts receivable increased by 28,000 Inventories increased by 8,000 Depreciation expense was 36,000

Explanation / Answer

Q12. The journal entry: Interest expense Account Dr. 40500    Cash account (740000*10%*6/12) 37000    Discount on bonds payable (21000/6) 3500 Q16. Journal entry: Cash account Dr. 343395     Bonds payable Account 330000     Premium on Bonds payable Account 13395 Q20. Cashflows from Operating activities: Net income for the year 58000 Adjustment required: Accounts payable decrease -21000 Accounts receivable increase -28000 Inventory increase -8000 Depreciation 36000 Net cash provided from operating activities 37000 Q22. Amort chart: Year Payment Interest Principal paid Outstanding Balance Year 1 34177 21000 13177 196823 Year 2 34177 19682 14495 182328 Journal entry for second payment: Instalment note payable Dr. 13177 Interest expense Account Dr. 21000       Cash account 34177

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