Question

Presented below are four independent situations.

(a) On March 1, 2018, Crane Co. issued at 104 plus accrued interest $3,690,000, 9% bonds. The bonds are dated January 1, 2018, and pay interest semiannually on July 1 and January 1. In addition, Crane Co. incurred $30,000 of bond issuance costs.

Compute the net amount of cash received by Crane Co. as a result of the issuance of these bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.)

Net amount of cash received       $

(b) On January 1, 2017, Cheyenne Co. issued 9% bonds with a face value of $668,000 for $589,317 to yield 11%. The bonds are dated January 1, 2017, and pay interest annually.

What amount is reported for interest expense in 2017 related to these bonds, assuming that Cheyenne used the effective-interest method for amortizing bond premium and discount? (Round answer to 0 decimal places, e.g. 38,548.)

Interest expense to be reported for 2017       $

(c) Ayayai Building Co. has a number of long-term bonds outstanding at December 31, 2017. These long-term bonds have the following sinking fund requirements and maturities for the next 6 years.

Sinking Fund
Maturities
2018       $305,000       $109,000
2019       109,000       272,000
2020       109,000       109,000
2021       197,000       -
2022       197,000       139,000
2023       197,000       109,000

Indicate how above information should be reported in the financial statements at December 31, 2017. (Round answers to 0 decimal places, e.g. 38,548.)

Maturities and sinking fund requirements
2018      
$
2019      
$
2020      
$
2021      
$
2022      
$
Thereafter      
$

(d) In the long-term debt structure of Pina Inc., the following three bonds were reported: mortgage bonds payable $9,907,000; collateral trust bonds $4,989,000; bonds maturing in installments, secured by plant equipment $3,965,000.

Determine the total amount, if any, of debenture bonds outstanding.

Total amount       $

Answer 1

Part a
Selling Price	$38,37,60,000.00
Accrued interest	$55,350.00
Total Cash Received	$38,38,15,350.00
Less: Bonds issuance cost	$30,000.00
Net Amount of Cash Received	$38,37,85,350.00
Part b
Carrying amount	$5,89,317.00
Interest rate	11%
Interest expenses	$64,824.87
Part C
2018	414000
2019	381000
2020	218000
2021	197000
2022	336000
2023	306000
Part D
None of the bonds are backed by debentures, thus debentures
bond outstanding would be Zero.