(Use the following information for questions 2 and 3) Always Be Counting Co. issued callablebonds on January 1, 2016. ABC's accountant has created the following amortization schedulefrom issuance until maturity: olqar zi ning of boong noilmogtoo olosu12 gnello stated in traDate1/1/20166/30/201612/31/20166/30/201712/31/20176/30/201812/31/2018 0006/30/201912/31/2019Show Transcribed TextCash as the Effectiveinteresta.3%b. 3.5%Ⓒ6%d. 7%interest$7,0007,0007,0007,0007,0007,000no 07,0007,000a.No gain or loss.b. $3,717 gain.c. $6,000 loss.d. $2,283 loss.$6,21110 $207,020 Star W$789206,2306,187813205,4176.163837204,5806,137863203,7176,112888202,8296,085 vol 915 a 201,913 pent200,971200,000Decrease in Outstanding Carrybalance6,0570943A6,029What was the market rate of interest on ABC's bonds at the time of issuance?GI9712. What was the market rate of interest on ABC's bonds at the time of issuance?CV. IInt expense =*JCarrying000,0026,0850x15olue0202,829 xl 6101,415 i12682 3726,08ID(₁6,085 =6,085=ai=3. ABC calls the bonds at 103 immediately after the interest payment on 12/31/2017 and retiresthem in full. What gain or loss, if any, would ABC record on this date?Cash 2.0 7,020-

I have checked the answer given by you for question 2 and the solution is correct. The market rate…

Answered: 6% d. 7% 3. ABC calls the bonds at 103…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 13P

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A partial amortization schedule for a 5-year note payable that Mabry Company issued on January 1, 2018, is shown as follows. AccountingPeriod PrincipalBalance January 1 CashPayment Applied toInterest Applied toPrincipal 2018 $ 123,000 $ 31,622 $ 11,070 $ 20,552 2019 102,448 31,622 9,220 22,402 2020 80,046 31,622 7,204 24,418 What is the amount of interest expense on this loan for 2021?
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PART - E Toner Limited (“Toner") borrows $180,000 on 1 July 2020 from Lighthouse Bank and signs a $180,000, 5%, 1-year promissory note. Assuming yearly accounting periods and a financial year end balance date of 31 December. Required: (i) Prepare the general journal entries to record the issuance of the promissory note. (ii) Prepare the general journal entries to record the adjusting journal entries as at 31 December 2020. (iii) Prepare the general journal entries to record the repayment on 1 July of 2021.
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The following amortization schedule indicates the interest and principal that Chip’s Cookie Corporation (CCC) must repay on an installment note established January 1, 2021. CCC has a December 31 year-end and makes the required annual payments on December 31. Year Beginning Notes Payable Interest Expense Repaid Principal on Notes Payable Ending Notes Payable 1 39,000 2,730 8,784 30,216 2 30,216 2,115 9,399 20,817 3 20,817 1,457 10,057 10,760 4 10,760 753 10,760 0 Total 7,055 39,000 Use the amortization schedule to determine (a) the amount of the (rounded) annual payment; (b) the amount of interest expense to report in the year ended December 31, 2021 (Year 1); (c) the note payable balance at January 1, 2024; and (d) the total interest and total principal paid over the note’s entire life. (Round your answers to the nearest whole dollar amount.)
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6% d. 7% 3. ABC calls the bonds at 103 immediately after the interest payment on 12/31/2017 and retires 6,085 101,415 1 them in full. What gain or loss, if any, would ABC record on this date? ID( Cash 207,020. a. No gain or loss. b. $3,717 gain. c. $6,000 loss. d. $2,283 loss.