Invested $100,000 in 5-year bonds. The bonds were purchased at par and bear interest at a rate of 8%
Question # 00199135
Posted By:
Updated on: 02/17/2016 11:24 AM Due on: 03/18/2016
There are 4 problems this week. Click on the tabs at the bottom of the spreadsheet to view each problem.
For each of the bonds listed below, record the three requested journal entries.
Dates and descriptions are not required.
Invested $100,000 in 5-year bonds. The bonds were purchased at par and bear interest at a rate of 8% per annum, payable semiannually.
(a)
Prepare the journal entry to record the initial investment.
(b)
Prepare the journal entry that Dorchester would record on each interest date. No journal entries have been made to record monthly interest.
(c)
Prepare the journal entry that Dorchester would record at maturity of the bonds. The journal entry to record the final interest payment was made separately.
Invested $100,000 of face amount of 5-year bonds. The bonds were purchased at 103, and bear interest at a stated rate of 8% per annum, payable semiannually.
(a)
Prepare the journal entry to record the initial investment.
(b)
Prepare the journal entry that Dorchester would record on each interest date. No journal entries have been made to record monthly interest.
(c)
Prepare the journal entry that Dorchester would record at maturity of the bonds. The journal entry to record the final interest payment was made separately.
Invested $100,000 of face amount of 4-year bonds. The bonds were purchased at 98, and bear interest at a stated rate of 8% per annum, payable semiannually.
(a)
Prepare the journal entry to record the initial investment.
(b)
Prepare the journal entry that Dorchester would record on each interest date. No journal entries have been made to record monthly interest.
(c)
Prepare the journal entry that Dorchester would record at maturity of the bonds. The journal entry to record the final interest payment was made separately.
For each of the items below, state if the lease is an operating lease or a capital lease
Reminder: Lessor is the party that owns the item, Lessee is the party using the item
Item 1
The lessee reports the leased asset on its balance sheet
Item 2
Payments are reported fully as rent expense
Item 3
Ownership of the property passes to the lessee by the end of the lease term
Item 4
The lease term is at least 75% of the remaining life of the property
Item 5
Interest expense is measured and reported by the lessee
Item 6
Depreciation of the leased asset is not reported by the lessee
Item 7
At the inception of the lease, the lessee records both an asset and liability
Item 8
The lessee reports a liability for the present value of all future payments anticipated under the lease agreement
Item 9
The lessor continues to report the tangible asset covered by the lease on its balance sheet
Listed below are nine fixed asset transactions. Record the journal
entries. Dates and descriptions are not required. The only account
titles you will need are listed:
Account titles:
Cash
Land
Land Improvements
Building
Equipment
Expense (determine expense account title)
Prepaid account (determine full account title)
Item 1
Paid $2,500 for one year insurance coverage on equipment
Item 2
Paid $7,500 for trees and shrubs
Item 3
Paid $500 attorney's fees for document preparation related
to land purchase
Item 4
Item 5
Paid $150,000 for land and building.
The land was
separately valued at $40,000, and the building at $120,000.
Hint - the cash is only $150,000 and the entry must
balance.
Paid $1,000 freight costs on purchase of new furniture
Item 6
Paid $300 for staplers, trash cans, and desktop mats
Item 7
Item 8
Ordered new $50,000 truck, to be delivered and paid for in
the future
Paid $10,000 of interest costs on loan on active building
construction project
Item 9
Paid $25,000 to expand parking lot paving
Item 1
Item 2
Item 3
Item 4
Item 5
Item 6
Item 7
Item 8
Item 9
Depreciation
Ace Specialties bought a delivery truck for $40,000 cash. The expected useful life is 5 years and the salvage value is $5,000.
Ace uses a calendar year and the truck was purchased on July 1, 2015.
Calculate the depreciation for each year using the straight line method and the double declining balance method.
Show the journal entry for year one for the double declining balance method.
Straight line method
year
depreciation
remaining book value
2015
2016
2017
2018
2019
2020
2021
Double declining balance method
year
depreciation
remaining book value
account
debit
2015
2016
2017
2018
2019
2020
2021
Journal Entry
date
12/31/2015
credit
For each of the bonds listed below, record the three requested journal entries.
Dates and descriptions are not required.
Invested $100,000 in 5-year bonds. The bonds were purchased at par and bear interest at a rate of 8% per annum, payable semiannually.
(a)
Prepare the journal entry to record the initial investment.
(b)
Prepare the journal entry that Dorchester would record on each interest date. No journal entries have been made to record monthly interest.
(c)
Prepare the journal entry that Dorchester would record at maturity of the bonds. The journal entry to record the final interest payment was made separately.
Invested $100,000 of face amount of 5-year bonds. The bonds were purchased at 103, and bear interest at a stated rate of 8% per annum, payable semiannually.
(a)
Prepare the journal entry to record the initial investment.
(b)
Prepare the journal entry that Dorchester would record on each interest date. No journal entries have been made to record monthly interest.
(c)
Prepare the journal entry that Dorchester would record at maturity of the bonds. The journal entry to record the final interest payment was made separately.
Invested $100,000 of face amount of 4-year bonds. The bonds were purchased at 98, and bear interest at a stated rate of 8% per annum, payable semiannually.
(a)
Prepare the journal entry to record the initial investment.
(b)
Prepare the journal entry that Dorchester would record on each interest date. No journal entries have been made to record monthly interest.
(c)
Prepare the journal entry that Dorchester would record at maturity of the bonds. The journal entry to record the final interest payment was made separately.
For each of the items below, state if the lease is an operating lease or a capital lease
Reminder: Lessor is the party that owns the item, Lessee is the party using the item
Item 1
The lessee reports the leased asset on its balance sheet
Item 2
Payments are reported fully as rent expense
Item 3
Ownership of the property passes to the lessee by the end of the lease term
Item 4
The lease term is at least 75% of the remaining life of the property
Item 5
Interest expense is measured and reported by the lessee
Item 6
Depreciation of the leased asset is not reported by the lessee
Item 7
At the inception of the lease, the lessee records both an asset and liability
Item 8
The lessee reports a liability for the present value of all future payments anticipated under the lease agreement
Item 9
The lessor continues to report the tangible asset covered by the lease on its balance sheet
Listed below are nine fixed asset transactions. Record the journal
entries. Dates and descriptions are not required. The only account
titles you will need are listed:
Account titles:
Cash
Land
Land Improvements
Building
Equipment
Expense (determine expense account title)
Prepaid account (determine full account title)
Item 1
Paid $2,500 for one year insurance coverage on equipment
Item 2
Paid $7,500 for trees and shrubs
Item 3
Paid $500 attorney's fees for document preparation related
to land purchase
Item 4
Item 5
Paid $150,000 for land and building.
The land was
separately valued at $40,000, and the building at $120,000.
Hint - the cash is only $150,000 and the entry must
balance.
Paid $1,000 freight costs on purchase of new furniture
Item 6
Paid $300 for staplers, trash cans, and desktop mats
Item 7
Item 8
Ordered new $50,000 truck, to be delivered and paid for in
the future
Paid $10,000 of interest costs on loan on active building
construction project
Item 9
Paid $25,000 to expand parking lot paving
Item 1
Item 2
Item 3
Item 4
Item 5
Item 6
Item 7
Item 8
Item 9
Depreciation
Ace Specialties bought a delivery truck for $40,000 cash. The expected useful life is 5 years and the salvage value is $5,000.
Ace uses a calendar year and the truck was purchased on July 1, 2015.
Calculate the depreciation for each year using the straight line method and the double declining balance method.
Show the journal entry for year one for the double declining balance method.
Straight line method
year
depreciation
remaining book value
2015
2016
2017
2018
2019
2020
2021
Double declining balance method
year
depreciation
remaining book value
account
debit
2015
2016
2017
2018
2019
2020
2021
Journal Entry
date
12/31/2015
credit
-
Rating:
/5
Solution: Invested $100,000 in 5-year bonds. The bonds were purchased at par and bear interest at a rate of 8%