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Brittany, P11-7A On July 1, 2008, Rossilon Company issued

Resolved Question:

Brittany,

P11-7A
On July 1, 2008, Rossilon Company issued $4,000,000 face value, 8%, 10-year bonds at $3,501,514. This price resulted in an effective-interest rate of 10% on the bonds. Rossillon uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest July 1 and January 1

Instructions
(round all computations to the nearest dollar)
a. Prepare the journal entries to record the following transactions.
1. The issuance of the bonds on July 1, 2008
2. The accrual of interest and the amortization of the discount on December 31, 2008
3. The payment of interest and the amortization of the discount on July 1, 2009, assuming no accrual of interest on June 30.
4. The accrual of interest and the amortization of the discount on December 31, 2009.
b. Show the proper balance sheet presentation for the liability for bonds payable on the December 1, 2009 balance sheet
c. Provide the answers to the following questions in letter form.
1. What amount of interest expense is reported for 2009?
2. Would the bond interest expense reported in 2009 be the same as, greater than, or less than the amount that would be reported if the straight-line method of amortization were used?
3. Determine the total cost of borrowing over the life of the bond
4. Would the total bond interest expense be greater than, the same as, or less than the total interest expense that would be reported if the straight-line method of amortization were used?
P14-6A

Grania Company’s income statement contained the condensed information below

Grania Compnay
Income Statement
For the Year Ended December 31, 2008

Revenues $970,000
Operating expenses, excluding depreciation $624,000
Depreciation expense 60,000
Loss on sale of equipment 16,000 700,000
Income before income taxes 270,000
Income tax expense 40,000
Net Income $230,000
Grania’s balance sheet contained the comparative data at December 31, shown below

2008 2007
Accounts receivable $75,000 $60,000
Accounts payable 41,000 28,000
Income taxes payable 11,000 7000

Instructions: Prepare the operating activities section of the statement of cash flow using the direct method.
Submitted: 5 years ago.
Category: Business and Finance Homework
Expert:  Brittany replied 5 years ago.

Brittany :

HiCustomer Thanks for requesting me. I will have this ready for you shortly.

Customer:

thanks, XXXXX XXXXX post another one next.

Expert:  Brittany replied 5 years ago.
HiCustomer

Here is your answer:

http://www.mediafire.com/?7ub4002hh94wea4

Thank you,
Brittany
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