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Analyzing and Reporting Financial Statement Effects of Bond Transactions (FSET) On January 1, Hutton Corp. Issued $400,000 of 15-year, 11% bonds payable for $503,753, yielding an effective interest rate of 8%. Interest is payable semiannually on June 30 and December 31. a. Show computations to confirm the issue price of $503,753. • Note: Round your answers to the nearest whole dollar. Present value of principal repayment $ Present value of interest payments Selling price of bonds b. Record the bond issuance, semiannual interest payment, and premium amortization on June 30, and semiannual interest payment and premium amortization on December 31 in the financial statement effects template. Use the effective intere rate method. Transaction Jan. 1: Issue of bonds. Note: Use negative signs with your answers, when appropriate. Note: Select "N/A" as your answer if a part of the accounting equation is not affected. • Note: Carry all decimals in calculations; round the final answer to the nearest dollar. Jun. 30: Interest payment. Dec. 31: Interest payment. Cash Amount Cash Cash 0x 0x 0 Cash Asset 503,753✓✔ 0x 16,000 x ✓N/A ✔ N/A ÷ ✓N/A Noncash Assets 0✔ 0✔ 0✔ + Balance Sheet Liabilities ✔ Bonds payable Bond premium ✔ Bond premium ✔Bond premium 400,000 ✓ 103,753 ✔ ÷ ✔ (6,000) x # (6,000) x # Contributed Capital N/A Earned Capital Retained earnings Retained earnings 0✔ • Revenue. 0x ✓ = 0x ÷ M N/A Income Statement Expenses Interest expense Interest expense 0✔ + 16,000 x # ✔ (16,000) x Net Income 0✔ 16,000 x 0x

Analyzing and Reporting Financial Statement Effects of Bond Transactions (FSET) On January 1, Hutton Corp. Issued $400,000 of 15-year, 11% bonds payable for $503,753, yielding an effective interest rate of 8%. Interest is payable semiannually on June 30 and December 31. a. Show computations to confirm the issue price of $503,753. • Note: Round your answers to the nearest whole dollar. Present value of principal repayment $ Present value of interest payments Selling price of bonds b. Record the bond issuance, semiannual interest payment, and premium amortization on June 30, and semiannual interest payment and premium amortization on December 31 in the financial statement effects template. Use the effective intere rate method. Transaction Jan. 1: Issue of bonds. Note: Use negative signs with your answers, when appropriate. Note: Select "N/A" as your answer if a part of the accounting equation is not affected. • Note: Carry all decimals in calculations; round the final answer to the nearest dollar. Jun. 30: Interest payment. Dec. 31: Interest payment. Cash Amount Cash Cash 0x 0x 0 Cash Asset 503,753✓✔ 0x 16,000 x ✓N/A ✔ N/A ÷ ✓N/A Noncash Assets 0✔ 0✔ 0✔ + Balance Sheet Liabilities ✔ Bonds payable Bond premium ✔ Bond premium ✔Bond premium 400,000 ✓ 103,753 ✔ ÷ ✔ (6,000) x # (6,000) x # Contributed Capital N/A Earned Capital Retained earnings Retained earnings 0✔ • Revenue. 0x ✓ = 0x ÷ M N/A Income Statement Expenses Interest expense Interest expense 0✔ + 16,000 x # ✔ (16,000) x Net Income 0✔ 16,000 x 0x

Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
ChapterMB: Model-building Problems
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Analyzing and Reporting Financial Statement Effects of Bond Transactions (FSET) On January 1, Hutton Corp. issued $400,000 of 15-year, 11% bonds payable for $503,753, yielding an effective interest rate of 8%. Interest is payable semiannually on June 30 and December 31. a. Show computations to confirm the issue price of $503,753, • Note: Round your answers to the nearest whole dollar. Present value of principal repayment $ Present value of interest payments Selling price of bonds b. Record the bond issuance, semiannual interest payment, and premium amortization on June 30, and semiannual interest payment and premium amortization on December 31 in the financial statement effects template. Use the effective interest rate method. Transaction Jan. 1: Issue of bonds. Note: Use negative signs with your answers, when appropriate. Note: Select "N/A" as your answer if a part of the accounting equation is not affected. • Note: Carry all decimals in calculations; round the final answer to the nearest dollar. Jun. 30: Interest payment. Dec. 31: Interest payment. Cash Amount Cash Cash 0x 0x 0 Cash Asset 503,753 ✓ 0x 16,000 x ✔ N/A ✔ N/A ✔ N/A Noncash Assets Balance Sheet Liabilities 0✔ + ✔Bonds payable Bond premium 0✔ + 0✔ + ✔Bond premium Bond premium 400.000 ✓ 103,753 ✔ + (6,000) x ÷ ✔ (6,000) x # ✓ Contributed Capital + N/A Earned Capital Retained earnings Retained earnings 0✓ + 0x ÷ 0x ÷ Revenue ✓ ✓ ✔ N/A Income Statement Expenses Interest expense Interest expense 0 ✓ + 16,000 x ÷ ✔ (16,000) x → ✔ Net Income 16,000 x 0x
Transcribed Image Text:Analyzing and Reporting Financial Statement Effects of Bond Transactions (FSET) On January 1, Hutton Corp. issued $400,000 of 15-year, 11% bonds payable for $503,753, yielding an effective interest rate of 8%. Interest is payable semiannually on June 30 and December 31. a. Show computations to confirm the issue price of $503,753, • Note: Round your answers to the nearest whole dollar. Present value of principal repayment $ Present value of interest payments Selling price of bonds b. Record the bond issuance, semiannual interest payment, and premium amortization on June 30, and semiannual interest payment and premium amortization on December 31 in the financial statement effects template. Use the effective interest rate method. Transaction Jan. 1: Issue of bonds. Note: Use negative signs with your answers, when appropriate. Note: Select "N/A" as your answer if a part of the accounting equation is not affected. • Note: Carry all decimals in calculations; round the final answer to the nearest dollar. Jun. 30: Interest payment. Dec. 31: Interest payment. Cash Amount Cash Cash 0x 0x 0 Cash Asset 503,753 ✓ 0x 16,000 x ✔ N/A ✔ N/A ✔ N/A Noncash Assets Balance Sheet Liabilities 0✔ + ✔Bonds payable Bond premium 0✔ + 0✔ + ✔Bond premium Bond premium 400.000 ✓ 103,753 ✔ + (6,000) x ÷ ✔ (6,000) x # ✓ Contributed Capital + N/A Earned Capital Retained earnings Retained earnings 0✓ + 0x ÷ 0x ÷ Revenue ✓ ✓ ✔ N/A Income Statement Expenses Interest expense Interest expense 0 ✓ + 16,000 x ÷ ✔ (16,000) x → ✔ Net Income 16,000 x 0x
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