2. The Bernard Company issues 8%, 10-year bonds with a par value of $250,000 and semiannual interest payments. On the date of issue, the annual market rate for these bonds is 10% and the selling price is 87 ½ .
a> Prepare the general journal entry for the issuance of the bonds.
Debit Credit
b> Prepare the general journal entry for the 1st semi-annual interest payment assuming The Bernard Company uses the straight-line method to allocate interest expense.
Debit Credit
3. The new Airline Company had the following equity transactions during 2013. Make the appropriate journal entries:
a. Sold (issued) 8,000 shares of common stock, $1 par, for $21 per share.
B. Purchased 1,000 shares of common stock for the treasury for $22 per share.
c. Declared a .10 (10 cent) dividend on common stock.
d. Paid the common stock dividend.
e. Sold 25,000 shares of $20 par, preferred stock for $525,000. The dividend rate is $1 per share.
Problem 4
Vargas Company reported net income of $90,000 for the current year. Depreciation recorded on buildings and equipment amounted to $55,000 for the year. Balances of various asset and liability accounts at the beginning and end of the year are as follows:
Beginning of Year End of Year
Cash and cash equivalents $35,000 $45,000
Accounts receivable 29,000 24,000
Inventory 83,000 99,000
Prepaid expenses 7,000 4,000
Accounts payable 26,000 23,000
Accrued liabilities 4,000 6,000
Bonds payable 100,000 125,000
Instructions
Prepare the cash flows from the operating activities section of the statement of cash flows using the indirect method.
Problem 8 -
Prepare all the necessary journal entries to record the following transactions in 2013 for the Howard Company.
May 1 Discarded old store equipment that originally cost $66,000 and had a book value of $18,000 on the date of disposal. Assume depreciation on the equipment has already been recorded for the current year. (5 pts)
Debit Credit
June 30 Sold a delivery truck for $11,000. The delivery truck originally cost $77,000 and had accumulated depreciation of $68,000 on the date of sale. Assume the depreciation on the truck has already been recorded for the current year. (5 pts)
Debit Credit
Dec 31 Equipment with a 6-year useful life was purchased on January 1, 2010, for $62,000 and was sold for $12,000. The equipment had been depreciated using the straight-line method with an estimated salvage value of $2,000. Depreciation Expense was recorded on December 31, 2013. (5 pts)
Debit Credit
9. From the Adjusted Trial Balance below prepare an Balance Sheet in correct format.
The Old Baraboo Company
Adjusted Trial Balance
December 31, 2013
Account Title Debit Credit
Cash 14,450
Store Supplies 5,140
Prepaid Insurance 1,200
Equipment 31,000
Accumulated Depreciation 8,000
Accounts Payable 1,500
Wages Payable 2,700
Common Stock 10,000
Retained Earnings 25,650
Dividends 15,000
Revenue Earned 54,700
Depreciation Expense 2,000
Wage Expense 26,400
Insurance Expense 600
Rent Expense 3,600
Store Supplies Expense 1,200
Utilities Expense 1,960
Total 102,550 102,550
10. From the Adjusted Trial Balance below prepare an Income Statement in correct format.
The Old Baraboo Company
Adjusted Trial Balance
December 31, 2013
Account Title Debit Credit
Cash 14,450
Store Supplies 5,140
Prepaid Insurance 1,200
Equipment 31,000
Accumulated Depreciation 8,000
Accounts Payable 1,500
Wages Payable 2,700
Common Stock 10,000
Retained Earnings 25,650
Dividends 15,000
Revenue Earned 54,700
Depreciation Expense 2,000
Wage Expense 26,400
Insurance Expense 600
Rent Expense 3,600
Store Supplies Expense 1,200
Utilities Expense 1,960
Total 102,550 102,550