Chapter 10-Assignment 2 Question 2 (of 3) 6.00 points Marshalls Corporation comp

Question

Chapter 10-Assignment 2 Question 2 (of 3) 6.00 points Marshalls Corporation completed a $610,000, 6 percent bond issue on January 1,2015. The bonds pay interest each December 31 and mature 10 years from January 1, 2015 Required: 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 were issued Case A (Issued at 100) Case B (at 97) Case C (at 103) January 1, 2015-Financial statements a Bonds Payable b. Unamortized Premium (or discount) Carrying Value References eBook & Resources Worksheet Difficulty 2 Medium

Explanation / Answer

the following is the required table:

notes:

case A : bonds are issued at par so $610,000 is bonds payable and also the carrying value.

caseB: bonds are issued at a discount of (100 - 97 =3), disccount will be $610,000 * 3% =>$18,300.

carrying value will be $610,000 - 18,300 =>$591,700.

case C: bonds are issued at premium of (103 - 100=>3), premium will be $610,000*3%=>$18,300.

carrying value will be = $610,000 +18,300 =>$628,300.

January 1,2015 Case A Case B Case C a. Bonds payable $610,000 $610,000 $610,000 b. unamortized premium (or discount) nil ($18,300) $18,300 c. Carrying value $610,000 $591,700 $628,300

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