Question

Trail Runner USA, a tire manufacturer, guarantees its tires against defects for five years or 60,000 miles, whichever comes first. Suppose Trail Runner USA can expect warranty costs during the five-year period to add up to 4% of sales. Assume that a Trail Runner USA dealer in Denver, Colorado ade sales of S511 000 during 2018. Trail Runner USA received cash for 15% of the sales and took notes receivable for he remainder. Payments to satisfy customer warranty claims taled S19,000 dring 2018. Read the requirements. . Record the sales, warranty expense, and warranty payments for Trail Runner USA. (Record debits first, then credits. Exclude explanations from any joumal entries.) First, let's record the sale of the tires. Journal Entry Debit Credit Requirements Accrued Warranty Payable 1. Record the sales, warranty expense, and warranty payments for Trail Runner USA. lgnore cost of goods sold. 2. Post to the Accrued Warranty Payable T-account. The beginning balance was $18,000. At the end of 2018, how much in accrued warranty payable docs Trail Runner USA owe to its customers? Print Done Pearce Corporation issued $580,000 of 6%, 10-year bonds payable on March 31, 2019. The market interest rate at the date of issuance was 10%, and the bonds pay interest semiannually. Pearce Corporation's year-end is March 3 Read the requirements. 1. Using the PV function in Excel calculate the issue price of the bonds. (Round your answer to the nearest whole dollar) The issue price of the bonds is Requirerments 1. Using the PV function in Excel calculate the issue price of the bonds 2. Prepare an effectiva-interest amortization table for the bonds through the first three interest payments. Round amounts to the nearest dollar 3. Reoord Pearce Corporation's issuance of the bonds on March 31, 2019, and payment of the first semiannual interest amount and amortization of the bond discount on September 30, 2019. Explanations are not required Print Done Leon Corporation issued S400 000 of 10%. 10-year bonds payable on January 1 2019 end is June 30 e market interest ate at the date of isa ance was 8 and the bonds ne 30 an December orporation s ea ay interest sem annua , on n Read the requirements. 1. Using the PV tunction in Excel, calculate the issue price of the bonds. (Round your answer to the nearest whole dollar.) The issue price of the bonds is $ i Requirements 1 Using the PV function in Excel calculate the issue price of the bonds 2. Prepare an effective-interest amortization table for the bonds through the first three interest payments. Round amounts to the nearest dollar 3. Record Leon Corporation's issuance of the bonds on January 1, 2019, and payment of the first semiannual interest amount and amortization of the bond premium on June 30, 2019. Explanations are not required. Print Done Determine whether the following bonds payable will be issued at par value, at a premium, or at a discount. a. Evergreen Company issued bonds payable that pay stated interest of 6 1/4%. On the date of issuance. the market interest rate was 6 3/4%.

Answer 1

Trail Runner USA

1.

Accounts	Debit	Credit
Cash (15% x $511000)	76650
Notes receivable	434350
Sales revenue		511000
Warranty expense (4% x $511000)	20440
Accrued warranty payable		20440
Accrued warranty payable	19000
Cash		19000

2. $19,440

Accrued warranty payable
Beg. Bal.		18000
Warranty payments	19000	20440	Warranty expense
End. Bal.		19440

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