E14-8 presented below are three independent situations.
E14-8 Presented below are three independent situations.
(a) CeCe Winans Corporation incurred the following costs in connection with the issuance of bonds: (1) printing and engraving costs, $12,470; (2) legal fees, $47,810, and (3) commissions paid to underwriter, $73,080.
What amount should be reported as Unamortized Bond Issue Costs, and where should this amount be reported on the balance sheet? (Round answer to 0 decimal places, e.g. 38,548.)
|
Amount to be reported as Unamortized Bond Issue Costs |
$ |
(b) George Gershwin Co. sold $2,129,000 of 12%, 9-year bonds at 105 on January 1, 2014. The bonds were dated January 1, 2014, and pay interest on July 1 and January 1. If Gershwin uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2014, and December 31, 2014. (Round answer to 0 decimal places, e.g. 38,548.)
|
Interest expense to be recorded |
$ |
(c) Ron Kenoly Inc. issued $710,300 of 8%, 9-year bonds on June 30, 2014, for $556,480. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If Kenoly uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2014. (Round answer to 0 decimal places, e.g. 38,548.)
|
Interest expense to be recorded |
$ |
