Question :
25) On December 31, 2011, Bill’s Hooks, Inc. issued $10,000 : 1253342
25) On December 31, 2011, Bill’s Hooks, Inc. issued $10,000 worth of 8% bonds at 88. The market rate of interest at the time of issue was 10%. These are 10-year bonds with interest paid annually at December 31. The company uses the effective-interest method to amortize the discount. For each item listed below, fill in the correct dollar amount in the column that represents the financial statement where the item will appear. Round amounts to the nearest penny.
Income Statement
Statement of Cash Flows
Balance Sheet
1
Proceeds from issuing bonds
2
Interest expense for the year ended December 31, 2012
3
Interest paid for the year ended December 31, 2012
4
Carrying value of the bonds at December 31, 2012
5
Interest expense for the year ended December 31, 2013
6
Interest paid for the year ended December 31, 2013
7
Carrying value of the bonds at December 31, 2013
26) On December 31, 2011, Dew Drop Inn issued $10,000 worth of 10% bonds at 113 because the market rate of interest at the time of issue had fallen to 8%. Interest on these 10-year bonds is paid annually at December 31. The company uses the effective-interest method to amortize the premium. For each item listed below, fill in the correct dollar amount in the column that represents the financial statement where the item will appear:
Income Statement
Statement of Cash Flows
Balance Sheet
1
Proceeds from issuing bonds
2
Interest expense for the year ended December 31, 2012
3
Interest paid for the year ended December 31, 2012
4
Carrying value of the bonds at December 31, 2012
5
Interest expense for the year ended December 31, 2013
6
Interest paid for the year ended December 31, 2013
7
Carrying value of the bonds at December 31, 2013
27) On December 31, 2011, Ben’s Batteries, Inc. issued $10,000 worth of 10%, 10-year bonds at 97. The market rate of interest at the time of issue was 11%. These bonds pay interest annually at December 31. The company uses the effective-interest method to amortize the discount.
Required: For each item listed below, fill in the correct dollar amount in the column that represents the financial statement where the item will appear: Round amounts to the nearest penny.
Income Statement
Statement of Cash Flows
Balance Sheet
1
Proceeds from issuing bonds
2
Interest expense for the year ended December 31, 2011
3
Interest paid for the year ended December 31, 2011
4
Carrying value of the bonds at December 31, 2011
5
Interest expense for the year ended December 31, 2012
6
Interest paid for the year ended December 31, 2012
7
Carrying value of the bonds at December 31, 2012
