Sikes Corporation, whose annual accounting period ends on December 31, issued th

Question

Sikes Corporation, whose annual accounting period ends on December 31, issued the following bonds:

1. For each of the three independent cases that follow, provide the following amounts to be reported on the January 1, 2015, financial statements immediately after the bonds are issued. (Negative amounts should be indicated with a minus sign.)

Case A

(issued at 100)

Case B

(at 97)

Case C

(at 101)

Date of bonds January 1, 2015 Maturity amount and date 300,000 due in 10 years(December 31, 2014) interest 10 percent per year payable each December 31 Date issued January 1, 2015

Explanation / Answer

January 1, 2015 Financial Statements Case A issued at 100 Case B 97 Case C at 101 Bonds Payable 300000 300000 300000 Unamortised Premium or discount 0 9000 3000 Carrying value 300000 291000 303000

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