1 P14-31A Analyzing, journalizing, and reporting bond transactions Billy's Hamburgers issued 596, 10-year bonds payable at...

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1 P14-31A Analyzing, journalizing, and reporting bond transactions Billys Hamburgers issued 596, 10-year bonds payable at 90 on December 31, 2012. At December 31, 2014, Billy reported the bonds payable as follows: Long Term Liabilities: Bonds Payable Less: Discounts on Bonds Payable Net Bonds Payable $ 400,000 s 32,000 s 368,000 10 12 13 14 15 16 17 18 P14-31A 19 20 Billy pays semiannual interest each June 30 and December 31 Calc Format Total 4.00 4.00 3.00 N/A 11.00 Requirements 23 24 Answer the following questions about Billys bonds payable: What is the maturity value of the bonds? What is the carrying amount of the bonds at December 31, 2014? 27 Grading P11-26A P11-27A P14 30A P14-31A Ready

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Answer 1

Answer #1

Requirement 1

Maturity value of Bonds= $400000

The maturity amount of bond is the face value of bond unless bonds are redeemed at premium of discount.

Requirement 2

Carrying value of Bonds on Dec 31 2014= $368000

Carrying value of bond is equal to Amount received on issue of bond plus/ minus amount of discount/ premium .

Bonds were issue at $360000 -------(400000/100 x 90)

Add: Discount redeemed $8000 -----(2000 per semiannual x 4 payments in 2 years)

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Answer 2

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1 P14-31A Analyzing, journalizing, and reporting bond transactions Billy's Hamburgers issued 596, 10-year bonds payable at...

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