MC 14.88 – Auerbach Inc.
Intermediate Accounting
Spiceland, Nelson, and Thomas
10th Edition
Given the face value, the market rate, and the price the bonds are issued at… find the interest expense.
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Given the face value, the market rate, and the price the bonds are issued at… find the interest expense.
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Given that bonds were issued on a semiannual basis.. find how much the bond should be discounted after one cycle (half a year).
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Given the coupon percent of a bond, the face amount, the amount it was priced at, and the yield percent… determine what would be reported on the balance sheet, income statement, and statement of cash flows.
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Given the face value of a bond, the time to maturity, the percent of the bond, when interest is paid, the price issued at, and the annual return … prepare an amortization schedule using both effective and straight-line methods while also preparing a journal entry to record the interest.
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Given an amortization schedule… complete eight different requirements consisting of face amount, initial selling price, term to maturity, approach used, stated rate, effective rate, total interest, and total effective interest recorded.
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Given the percent that a bond is issued for, the face amount, the cost of sold bonds, and the amount acquired… prepare journal entries for both of the companies and their investments.
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A document called a bond indenture outlines the specific provisions of a bond issue.
The periodic interest expense equals the amount of debt outstanding during the period multiplied by the stated interest rate.
The book value or outstanding balance of zero-coupon bonds rises as interest is periodically recognized.
Bonds will be sold at a premium if the market interest rate is higher than the stated rate.