Bonds Payable

BONDS PAYABLE Problem 8-1 (AICPA Adapted) Glen Company had the following long-term debt: Sinking fund bonds, maturing in installments

2,200,000

Industrial revenue bonds, maturing in installments

1,800,000

Subordinated bonds, maturing on a single date

3,000,000

What is the total amount of serial bonds? a. 3,000,000 b. 4,000,000 c. 4,800,000 d. 7,000,000 Problem 8-2 (AICPA Adapted) Zola Company had the following long-term debt: Bonds maturing in installments, secured by machinery

1,000,000

Bonds maturing on a single date, secured by realty

1,800,000

Collateral trust bonds What is the total amount of debenture bonds? a. 2,000,000 b. 1,000,000 c. 1,800,000 d. 0 Problem 8-3 (AICPA Adapted)

2,000,000

Blue Company reported the following long-term debt on December 31, 2016: 9% registered debentures, callable in 2017, due in 2018

3,500,000

11% collateral trust bonds, convertible into ordinary shares beginning in 2017, due in 2018

3,000,000

10% subordinated debentures, P500,000 maturing annually beginning in 2017

1,500,000

What is the total amount of term bonds? a. 3,000,000 b. 3,500,000 c. 5,000,000 d. 6,500,000 Problem 8-4 (AICPA Adapted) On April 1, 2016, Greg Company issued at 99 plus accrued interest, 2,000 of 8% P1,000 face value bonds. The bonds are dated January 1, 2016, mature on January 1, 2016, and pay interest on January 1 and July 1. The entity paid bond issue cost of P70,000. From the bond issuance, what is the net cash received? a. 2,020,000 b. 1,980,000 c. 1,950,000 d. 1,910,000 Problem 8-5 (AICPA Adapted) On March 1, 2016, Cain Company issued at 103 plus accrued interest 4,000 of 9%, P1,000 face value bonds. The bonds are dated January 1, 2016 and mature on January 1, 2016.

Interest is payable semiannually on January 1 and July 1. The entity paid bond issue cost of P200,000. What is the net cash received from the bond issuance? a. 4,320,000 b. 4,180,000 c. 4,120,000 d. 3,980,000 Problem 8-6 (AICPA Adapted) During the current year, Eddy Company incurred the following costs in connection with the issuance of bonds: Promotion cost

200,000

Printing and engraving

150,000

Legal fees

800,000

Fees paid to independent accountants for registration Commissions paid to underwriter

100,000 1,500,000

What amount should be recorded as bond issue costs to be amortized over the term of the bonds? a. 2,550,000 b. 2,750,000 c. 1,500,000 d. 1,050,000 Problem 8-7 (AICPA Adapted) On November 1, 2016, Mason Company issued P8,000,000 of 10-year, 8% term bonds dated October 1, 2016. The bonds were sold to yield 10% with total proceeds of P7,000,000 plus accrued interest. Interest is paid every April 1 and October 1.

What amount should be reported as accrued interest payable on December 31, 2016? a. 175,000 b. 160,000 c. 116,667 d. 106,667 Problem 8-8 (AICPA Adapted) On January 31, 2016, Beau Company issued P3,000,000 maturity value, 12% bonds for P3,000,000 cash. The bonds are dated December 31, 2015 and mature on December 31, 2025. Interest is payable semiannually on June 30 and December 31. What amount of accrued interest payable should be reported on September 30, 2016? a. 270,000 b. 240,000 c. 180,000 d. 90,000 Problem 8-9 (AICPA Adapted) On June 30, 2016, Huff Company issued at 99, five thousand of 8%, P1,000 face value bonds. The bonds were issued through an underwriter to whom the entity paid bond issue cost of P425,000. On June 30, 2016, what amount should be reported as bond liability? a. 4,525,000 b. 4,950,000 c. 5,000,000 d. 4,575,000

Problem 8-10 (AICPA Adapted) On July 1, 2016, Carr Company issued at 104, five thousand of 10% P1,000 far value bonds. The bonds were issued through an underwriter to whom the entity paid bond issue cost of P125,000. On July 1, 2016, what amount should be reported as bond liability? a. 4,875,000 b. 5,075,000 c. 5,200,000 d. 5,325,000 Problem 8-11 (IAA) Aye Company is authorized to issue P5,000,000 of 6%, 10-year bonds dated July 1, 2016 with interest payments on June 30 and December 31. When the bonds are issued on November 1, 2016, the entity received cash of P5,150,000 including accrued interest. What is the discount or premium on bonds payable? a. 150,000 bond premium b. 50,000 bond premium c. 150,000 bond discount d. No bond premium and discount