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Questions 1&2 EY Calculate the interest expense on the bonds for the first year that the bonds are outstanding. P10-12B. Accounting for Bonds Issues at a Premium The Miller Corporation issued $100 mi

Questions 1&2

EY
Calculate the interest expense on the bonds for the first year that the bonds are outstanding.
P10-12B. Accounting for Bonds Issues at a Premium The Miller Corporation issued $100 million maturity
value of six percent coupon rate bonds, with interest paid semiannually. At the time of the bond issu-
b.
С.
LO5
endix 10A)
Calculate the book value of the bonds at the end of the first year.
Ul the six percent
K10-3. Busines
expan
ance, equivalent risk-rated debt instruments carried a yield rate of four percent. The bonds matured
in ten years.
earning
Calculate the proceeds that the Miller Corporation would receive from the sale of the bonds.
а.
b.
Calculate the interest expense on the bonds for the first year.
Calculate the book value of the bonds at the end of the first year.
on wh
С.
perce
75,0
SERIAL PROBLEM: KATE'S CARDS
1.
(Note: This is a continuation of the Serial Problem: Kate's Cards from Chapters 1 through 9.)
2
SP10.
due two years from the origination date of the note. Kate has been accruing interest on a monthly basis
in the amount of $75. Kate would like to know how she should record the interest in May, the month she
makes the first interest payment. She is unsure how much expense will need to be recorded in May.
Recall that Kate previously obtained a $15,000 bank loan, signing a note payable, on November 30. The
note required semiannual interest payments at the rate of six percent. The entire principal balance was
The upcoming interest payment is really not Kate's main concern right now. She was just notified
by a lawyer that she is being sued for copyright infringement. Mega Cards Incorporated, one of the
largest greeting card companies, believes that one of Kate's designs is too similar to one of Mega's
designs for it to be coincidence, and has, therefore, decided to sue Kate's Cards. Mega has a prior
reputation for suing small companies and settling out of court for lesser damages. Kate, however,
knows that her design is original and that she had never previously seen the Mega design that is the
EYK10-4.
Chapter 10
Accounting for Liabil
Cambridge Business Publishers
subject of the lawsuit. She has determined to fight the lawsuit, regardless of the cost. She doesn't
know, however, how this will affect her financial statements.
1. Record the May journal entry for Kate's first interest payment. How much interest expense is
reported in May?
2. How should Kate report the copyright infringement lawsuit in her financial statements?
EXTENDING YOUR KN
ORTING AND ANALYSIS
-1. Financial Reporting Problem: Columbia Sportswear Company The financial statements for
the Columbia Sportswear Company can be found in Appendix A at the end of this book.
Required
Answer the following questions:
a. How much were Columbia's current liabilities as of December 31, 2017?
b. What two items made up the largest percentage of Colum
a's

Sep 18 2020 Read more Less More

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