Question

For each event listed below, identify the accounts that should be used to record the economic...

For each event listed below, identify the accounts that should be used to record the economic event and the dollar amount for that account. You should enter the letters that correspond to the accounts that should be used, along with the related dollar amounts. Your answers will be evaluated based on whether you have included every account and the related dollar amount that is needed and not included any account that is not needed. An account can be used in analyzing more than one event.( Detail analyze require list)

A. additional paid-in capital

B. bonds payable

C. cash

D. common stock

E. discount on bonds payable

F. equipment

G. interest expense

H. interest payable

I. preferred stock

J. premium on bonds payable

K. treasury stock

Example:

Event: The company purchased equipment, paying cash of $15,000

Answer: F $15,000; C $15,000

1.The company issued bonds in the amount of $10,000,000, receiving cash of $9,400,000 at the time of issuance.

2. The company issued 40,000 shares of $10 par-value preferred stock for $2,000,000.

3. The company repurchased 500 shares of common stock for $82 per share.

4. At year-end, the company recorded an accrual for interest owed and unpaid to bondholders in the amount of $120,000.

5. At year-end, the company recorded the appropriate amortization for the $10,000,000 in bonds issued in the previously listed event. The bonds have a 10-year maturity, and the company uses the straight-line method to record amortization for one year.

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Homework Answers

Answer #1

1. The company issued bonds in the amount of $10,000,000, receiving cash of $9,400,000 at the time of issuance.

Answer: C $9,400,000; E $600,000; B $10,000,000

2. The company issued 40,000 shares of $10 par-value preferred stock for $2,000,000.

Answer: C $2,000,000; I $400,000; A $1,600,000

3. The company repurchased 500 shares of common stock for $82 per share.

Answer: K $41,000; C $41,000

4. At year-end, the company recorded an accrual for interest owed and unpaid to bondholders in the amount of $120,000.

Answer: G $120,000; H $120,000

5. At year-end, the company recorded the appropriate amortization for the $10,000,000 in bonds issued in the previously listed event. The bonds have a 10-year maturity, and the company uses the straight-line method to record amortization for one year.

Answer: G $60,000 ; E $60,000

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