Question

Doyle Company issued $202,000 of 10-year, 7 percent bonds on January 1, 2016. The bonds were issued at face value. Interest is payable in cash on December 31 of each year. Doyle immediately invested the proceeds from the bond issue in land. The land was leased for an annual $46,000 of cash revenue which was collected on December 31 of each year, beginning December 31, 2016. (Select "cl" for all the closing entries.) Cash 2016 2016 End. Bal End. Bal 2017 Retained Earnings 2016 End. Ba End. Bal 2017 Bonds Payable 2016 End. Bal End. Bal Lease Revenue Interest Expense 2016 2016 End. Bal 2017 End. Bal 2017 End. Bal End. Bal Prepare the income statement, balance sheet, and statement of cash flows for 2016 and 2017. (Amounts to be deducted and net loss amount should be indicated with minus sign) Income Statements For the Year Ended December 31 For the Year Ended December 3 Total assets Stockholders equity Total stockholder's equity Total liab and stockholders equity For the Year Ended December 31 Cash fows from operating acivibes Net cash flow from operating act Cash fows from investing activities Cash fows from financing activities Net change in cash Ending cash balance

Answer 1

	Working Notes
	Journal Entries
	Cash A/c Dr	202000
	To Bond payable /Common Stock		202000
	(Since bond issued)
	7% bond
	interest payable	14140
	TO BANK /CASH		14140
	LAND	202000
	TO BANK /CASH		202000
	CASH/ BANK	46000
	TO INCOME		46000
Answer Begin from here
	Doyle Company
	Income Statements
	For the year ended Dec'16 & Dec'17
		2016	2017
	Income from Land	46000	46000
Less:	Interest on bond	14140	14140
	Net profit	31860	31860
	Doyle Company
	Balance sheet
	For the year ended Dec'16 & Dec'17
		2016	2017
	Assets
	Land	202000	202000
	Cash/Bank	31860	63720
	Total Assets	233860	265720
	Liabilities
	StockHolder Equity
	Common Stock	202000	202000
	Reverse & Surplus	31860	63720
	Total Liab nad stockholders equity	233860	265720
	Doyle Company
	Statement of Cash Flow
	For the year ended 31 Dec
		2016	2017
A	Cash Flow from Operating Acitivies	0	0
	Cash Flow from investment Activities
	Purchase of Land	-202000	0
	Revenue for land as lease	46000	46000
B	Cash Flow from investment Activities	-156000	46000
	Cash Flowfrom Financing Activies
	Bond Issued	202000	0
	Interest paid on Bond	-14140	-14140
C	Cash Flowfrom Financing Activies	187860	-14140
D=A+B+C	Total Cash Flow from Operating Activities	31860	31860
F	Opening Cash Balance	0	31860
G=D+F	Ending Cash Balance	31860	63720

Assumption

Buy of land and giving it under lease is not considered it ordinary course of business . If land is considered as ordinary course of business than same will be appeared as Inventory in Balance sheet instead of Asset.

And in cash flow statement same will be cash flow from operating activities instead of cash flow from investment activities .