Problem Solving Question I11 (10 pts) On January 1 2015, Patterson Inc. issued $100,000, 8% bonds...

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Answer 1

Answer #1

Face Value of Bonds = $100,000
Issue Value of Bonds = $92,278

Discount on Bonds Payable = Face Value of Bonds - Issue Value of Bonds
Discount on Bonds Payable = $100,000 - $92,278
Discount on Bonds Payable = $7,721

Annual Coupon Rate = 8%
Annual Coupon = 8% * $100,000
Annual Coupon = $8,000

Answer 1.

Unamortized Interest Discount Date Cash Paid Carrying Value Amortized Expense Discount 7,722 $92,278 6,494 $93,506 Jan. 01, 2

Answer 2.

DeoitCredit $ 9,228 Date General Journal Dec. 31, 2015 Interest Expense $ 8,000 $1,228 Cash Discount on Bonds Payable

Answer 3.

Balance Sheet December 31, 2015 Long-term Liabilities: Bonds Payable Less: Discount on Bonds Payable $ 100,000 6,494 93,506

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Answer 2

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Problem Solving Question I11 (10 pts) On January 1 2015, Patterson Inc. issued $100,000, 8% bonds...

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